📈 PMI Data Releases Today

What is it and what are we looking for?

At 9:45 AM ET S&P Global Services PMI data will be released.

This data has potential to move the market so you will want to be sure to keep an eye on the number that is released and how the stock market reacts to it.

What is PMI?

PMI stands for Purchasing Managers Index. It is an indicator of the health of the manufacturing and services sectors based on a survey that is distributed to supply chain managers across a number of industries. Manufacturing PMI and Services PMI are released separately and then aggregated as Composite PMI.

The equation for calculating PMI is:

PMI = (P1 * 1) + (P2 * 0.5) + (P3 * 0)

P1 = percentage of answers reporting an improvement  
P2 = percentage of answers reporting no change 
P3 = percentage of answers reporting a deterioration

As a rule of thumb, the interpretation of results are as follows:

• PMI < 45 signals the economy is contracting

• PMI = 45-55 is neutral

• PMI > 55 signals the economy is overheated

You can also compare PMI from month to month to get a very high level sense of how supply chain is performing.

What Number are we Looking for?

Below is a look at how Services PMI has come in over the past year:

For tomorrow’s release, here are the key numbers to be aware of:

• Forecast: 50.8

• Previous: 50.6

How the number will affect the market is unclear - it’s possible that a lighter number will be interpreted as good news as it would signal that the economy is cooling off. However it is possible that investors are beginning to change their sentiment and will view light numbers as bad news for the stock market.

For analysis of how recent economic data is impacting the stock market, watch the two minute clip below: