U.S. stock futures were lower to start the day as weak global factory activity reports reignited fears about slower economic growth. Also, new threats of $4 billion of additional tariffs on European goods are affecting trading this morning.
The S&P 500 closed at a new all-time high of 2964.33 on Monday. The breakout did come with lower volume so at this point the new highs are suspect until the index trades at the new highs for a few more days. The RSI index is still moving higher in support of this new up move. Potential support will now become the old high of 2954.13, and traders will be watching this level closely in case this is genuinely a false breakout.
The U.S. PMI Manufacturing Index was reported at 50.6 for June compared to 50.1 for May, and ISM Manufacturing came out at 51.7 compared to 52.1 in May. The board Global Manufacturing PMI report came out at 49.4 for June compared to 49.8 for May.
We are currently long term bullish and short bullish.
The Relative Strength Index (RSI), developed by J. Welles Wilder, is a momentum Oscillator that measures the speed and changes of price movements.
The S&P 500 is an unmanaged index of 500 widely held stocks that is generally considered representative of the U.S stock market. Past performance may not be indicative of future results. Keep in mind that individuals cannot invest directly in any index, and index performance does not include transaction costs or other fees, which will affect actual investment performance. Individual investors’ results will vary. Opinions expressed are those of the author John N. Lilly III, and not necessarily those of Raymond James. “There is no guarantee that these statements, opinions or forecast provided herein will prove to be correct. “The information contained was received from sources believed to be reliable, but accuracy is not guaranteed. Investing always involves risk and you may incur a profit or loss. No investment strategy can guarantee success. The charts and/or tables presented herein are for illustrative purposes only and should not be considered as the sole basis for your investment decision. International investing involves special risks, including currency fluctuations, different financial accounting standards, and possible political and economic volatility. Investing in emerging markets can be riskier than investing in well-established foreign markets.
PMI Manufacturing is based on monthly questionnaire surveys of selected companies, the Purchasing Managers’ Manufacturing Index (PMI) offers an advance indication on month-to-month activity in the private sector economy by tracking changes in variables such as output, new orders, stock levels, employment and prices across manufacturing industries. The final index for the current month is released roughly a week after the flash
The ISM manufacturing composite index from the Institute For Supply Management is a diffusion index calculated from five of the eleven sub-components of a monthly survey of purchasing managers at roughly 300 manufacturing firms nationwide. The survey queries purchasing managers about the general direction of production, new orders, order backlogs, their own inventories, customer inventories, employment, supplier deliveries, exports, imports, and prices. The five components of the composite index are new orders, production, employment, supplier deliveries, and inventories (their own, not customer inventories). The five components are equally weighted. The questions are qualitative rather than quantitative; that is, they ask about the general direction rather than the specific level of activity. Each question is adjusted into a diffusion index which is calculated by adding the percentage of positive responses to one-half of the unchanged responses
J.P. Morgan Global Manufacturing PMI gives an overview of the global manufacturing sector. It is based on monthly surveys of over 10,000 purchasing executives from 32 of the world’s leading economies, including the U.S., Japan, Germany, France and China which together account for an estimated 89 percent of global manufacturing output. It reflects changes in global output, employment, new orders and prices. The Global Manufacturing PMI is seasonally adjusted at the national level to control for varying seasonal patterns in each country and is produced by J.P. Morgan and Markit Economics in association with ISM and the International Federation of Purchasing and supply Management (IFPSM)