US services PMI in August
According to the report from Markit Economics, the August US Services PMI (purchasing managers’ index) report showed a strong improvement in the US (SPY) (QQQ) (VFINX) business climate. The PMI stood at 56 in August compared with 54.7 in July. This figure didn’t beat the preliminary market expectation of 56.9.
The services PMI has shown a gradual improvement since April 2017. Before that, it had been falling. The August PMI was the strongest expansion in services activity since November 2015.
Some key factors in the services PMI were:
- Production volumes showed strong improvement in August 2017.
- New orders and export orders were higher in August than in July 2017.
- Employment in the services sector improved in August.
The gradual rise in the US services PMI is also improving investor confidence in the US (IWM) (VOO) business climate. The strong rise in production volume in the service sector indicates that both domestic demand and international demand improved in the US economy in March 2017.
Performance of various ETFs in August
The SPDR S&P 500 ETF (SPY), which tracks the performance of the S&P 500 Index, rose nearly 0.3% in August 2017. The PowerShares QQQ Trust, Series 1 (QQQ), which tracks the performance of the major technology stocks in the United States, rose nearly 2% in August 2017.
In the next part of this series, we’ll analyze the performance of the UK services PMI in August 2017.