August Services Growth Exceeds Expectations As Manufacturing Slumps: Inflation Gradually Eases 'To Normal Levels'
Portfolio Pulse from Piero Cingari
The U.S. private sector showed stronger-than-expected growth in August, driven by the services sector, while manufacturing faced a significant decline. Inflation is easing, and the labor market is cooling. The U.S. dollar rallied, treasury yields rose, and major stock indices reacted negatively.
August 22, 2024 | 2:26 pm
News sentiment analysis
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NEGATIVE IMPACT
The Invesco QQQ Trust (QQQ) turned negative as major U.S. indices reacted to the PMI report, indicating concerns over economic reliance on the service sector.
The tech-heavy Nasdaq 100, tracked by QQQ, turned negative following the PMI report, reflecting market concerns about the economic outlook and reliance on the service sector.
CONFIDENCE 80
IMPORTANCE 50
RELEVANCE 60
NEGATIVE IMPACT
The iShares 20+ Year Treasury Bond ETF (TLT) fell by 0.8% as treasury yields rose following the PMI report, reflecting market reactions to economic data.
Treasury yields increased across the board after the PMI report, leading to a decline in TLT, which is sensitive to changes in interest rates and yields.
CONFIDENCE 85
IMPORTANCE 60
RELEVANCE 70
NEUTRAL IMPACT
The SPDR S&P 500 ETF Trust (SPY) remained flat as the market digested the PMI report, balancing strong services growth against manufacturing decline.
The S&P 500, tracked by SPY, showed little movement as investors weighed the positive services growth against the negative manufacturing data from the PMI report.
CONFIDENCE 75
IMPORTANCE 40
RELEVANCE 50
POSITIVE IMPACT
The Invesco DB USD Index Bullish Fund ETF (UUP) rallied as the U.S. dollar strengthened following the August PMI report, indicating reduced market expectations for significant Fed rate cuts.
The U.S. dollar index rose by 0.4% against a basket of currencies, driven by positive economic data from the PMI report, which reduced the likelihood of significant Fed rate cuts. This directly benefits UUP, which tracks the dollar's performance.
CONFIDENCE 90
IMPORTANCE 70
RELEVANCE 80