uploads///US Manufacturing PMI in October

October Manufacturing Report: Is the US Business Condition Improving?


Aug. 18 2020, Updated 4:40 a.m. ET

US business condition in October

The October manufacturing PMI (purchasing managers’ index) report indicates an improvement in the US (QQQ) (IWM) business condition. It stood at 51.9 in October, as compared to 51.5 in September 2016, and was above the market expectations of 51.7.

The manufacturing PMI in October improved in the last two months after showing a contraction in August 2016. A level above 50 indicates expansion in the activity, while anything below 50 indicates contraction.

Let’s look at some of the key factors in the manufacturing PMI:

  • Production volume rose in October 2016. The production index stood at 54.6, which is a fall of 1.8 points from September.
  • New order growth fell in October. The new order index stood at 52.1, which is a fall of 3 points from September.
  • The inventories index fell 2 points to 49.5 from September.
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Performance of various ETFs in October

The Industrial Select Sector SPDR ETF (XLI), which tracks the performance US industrial sector, fell 2% in October 2016. The SPDR S&P 500 ETF (SPY), which tracks the performance of the S&P 500 index, fell 1.7% in October 2016.

The appreciation of the US dollar (UUP) continues to weigh down the US industrial sector. The dollar is strengthening with the expectations of a rate hike in December 2016. The fall in the major indexes shows that the uncertainty over the US election on November 8 is rising.

In the next part of this series, we’ll analyze the performance of France’s manufacturing PMI in October 2016.


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