Services Sector Activity Strongly Expands In May: 'Notable Higher Business Activity, Faster New Orders Growth'
Portfolio Pulse from Piero Cingari
The U.S. service sector saw a strong expansion in May, reversing the decline from April. The ISM Services PMI rose to 53.8%, with significant increases in business activity and new orders. Stocks held gains, bond yields rose, and the U.S. dollar rallied.
June 05, 2024 | 2:30 pm
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POSITIVE IMPACT
The Invesco QQQ Trust (QQQ) outperformed with a 0.8% increase, driven by the strong ISM Services PMI report.
The tech-heavy QQQ benefits from positive economic data, reflecting investor confidence in growth sectors.
CONFIDENCE 90
IMPORTANCE 70
RELEVANCE 80
POSITIVE IMPACT
The SPDR S&P 500 ETF Trust (SPY) saw a 0.2% increase following the strong ISM Services PMI report for May.
The strong ISM Services PMI report indicates robust economic activity, which positively impacts the broader market, including SPY.
CONFIDENCE 90
IMPORTANCE 70
RELEVANCE 80
POSITIVE IMPACT
The Invesco DB USD Index Bullish Fund (UUP) rose by 0.5% as the U.S. dollar rallied following the strong ISM Services PMI report.
Positive economic data strengthens the U.S. dollar, benefiting UUP.
CONFIDENCE 90
IMPORTANCE 70
RELEVANCE 80
NEUTRAL IMPACT
The SPDR Gold Trust (GLD) was up 0.4% but trimmed gains as the U.S. dollar gained traction following the ISM Services PMI report.
Gold prices initially rose but faced pressure from a stronger U.S. dollar, leading to trimmed gains for GLD.
CONFIDENCE 85
IMPORTANCE 60
RELEVANCE 80
NEGATIVE IMPACT
The SPDR Dow Jones Industrial Average ETF (DIA) was down by 0.2% despite the positive ISM Services PMI report.
Despite positive economic data, DIA saw a slight decline, possibly due to sector-specific factors or profit-taking.
CONFIDENCE 85
IMPORTANCE 60
RELEVANCE 80
NEGATIVE IMPACT
The iShares 20+ Year Treasury Bond ETF (TLT) fell by 0.3% as long-dated Treasury yields rose following the ISM Services PMI report.
Rising Treasury yields typically lead to a decline in bond prices, negatively impacting TLT.
CONFIDENCE 90
IMPORTANCE 70
RELEVANCE 80