Manufacturing Contracts More Than Expected In June, 'Putting Pressure On Profitability': Yields Rise, Stocks Fall
Portfolio Pulse from Piero Cingari
The U.S. manufacturing sector contracted more than expected in June, marking the third consecutive month of decline. The ISM Manufacturing PMI Index fell to 48.5%, below the consensus of 49.1%. This contraction has put pressure on profitability and led to a mixed reaction in the stock market. The SPDR S&P 500 ETF Trust (SPY) fell 0.1%, the SPDR Dow Jones Industrial Average ETF (DIA) gained 0.1%, and the Invesco QQQ Trust (QQQ) fell 0.1%. Bond yields rose, causing the iShares 20+ Year Treasury Bond ETF (TLT) to tumble 1.7%.
July 01, 2024 | 2:44 pm
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NEUTRAL IMPACT
The SPDR Dow Jones Industrial Average ETF (DIA) gained 0.1% despite the negative manufacturing data, trimming earlier gains.
DIA showed resilience despite the negative manufacturing data, indicating mixed investor sentiment.
CONFIDENCE 80
IMPORTANCE 60
RELEVANCE 70
NEGATIVE IMPACT
The Invesco QQQ Trust (QQQ) fell 0.1% as tech stocks reacted to the weaker-than-expected manufacturing data.
Tech stocks, represented by QQQ, were negatively impacted by the weak manufacturing data, reflecting concerns about economic growth.
CONFIDENCE 85
IMPORTANCE 65
RELEVANCE 75
NEGATIVE IMPACT
The SPDR S&P 500 ETF Trust (SPY) fell 0.1% following the release of the ISM Manufacturing PMI report, which showed a larger-than-expected contraction in the U.S. manufacturing sector.
The larger-than-expected contraction in the manufacturing sector indicates economic weakness, which negatively impacts the broader market represented by SPY.
CONFIDENCE 90
IMPORTANCE 70
RELEVANCE 80
NEGATIVE IMPACT
The iShares 20+ Year Treasury Bond ETF (TLT) tumbled 1.7% as bond yields rose following the manufacturing data.
Rising bond yields, driven by the weak manufacturing data, negatively impacted TLT, which tracks long-term Treasury bonds.
CONFIDENCE 90
IMPORTANCE 75
RELEVANCE 85