Chicago PMI rises yet industrial ETFs fall
The July reading of the Chicago PMI (purchasing managers’ index) came out on Friday, July 31. The Chicago PMI summarizes current business activity. Investors in stocks and bonds track the index for important business activity clues that eventually affect their returns.
The Industrial Select Sector SPDR ETF (XLI) and the SPDR Dow Jones Industrial Average ETF (DIA), which track the performance of companies directly contributing to business activity in the United States, were down despite a positive indicator report. XLI was down 0.09% while DIA was down 0.30% on July 31’s close.
The Chicago Business Barometer
The ISM-Chicago Business Survey provides a regional view of the conditions in Chicago and the Mid-West areas of the United States. It’s a time-tested, market-moving report released monthly by the Institute for Supply Management of Chicago. The result of the survey, the Chicago Business Barometer, summarizes current business activity. It’s also known as the Chicago purchasing managers’ index or Chicago PMI.
Chicago PMI: July report
In July, the Chicago Business Barometer rose by 5.3 points to a six-month high of 54.7, fueled by strong gains in the new orders and production components. The bounce back in the barometer marks a solid start to the third quarter. It also suggested that, against a backdrop of concerns about weakening growth in Europe and China, the US economy is still growing firmer.
While business activity in the United States seemed to strengthen in July, the consumer sector continues to give mixed signals, with investor sentiments positive yet indicator readings weak for July.