Today, we’re in a very, very classic ‘bad is good’ reaction to the Flash PMIs
Today, we’re in a very, very classic ‘bad is good’ reaction to the Flash PMIs: Sevens Report Editor, Tom Essaye, Quoted in Barron’s
Weak Manufacturing Data Is Lifting the Stock Market, Sending Yields Lower
Sevens Report Research’s Tom Essaye told Barron’s that though upbeat earnings reports set a positive tone, the market was gaining after the S&P Global Flash U.S. Composite PMI came in lower than expectations. The US Manufacturing PMI fell to a four-month low of 49.9 in April from 51.9 in March.
“Today, we’re in a very, very classic ‘bad is good’ reaction to the Flash PMIs,” Essaye says. “So now you’re seeing yields off and stocks rebound—so kind of a reverse of what we’ve seen in the last two and a half weeks.”
Essaye says the latest earnings reports are helping, though he doesn’t believe it’s the reason stocks are up across the board.
“I don’t think earnings would cause this rally if the PMIs had been strong, or the price metrics were higher or anything like that,” he says. “But given the soft data, I think that earnings are adding fuel to the fire. And I think that’s a positive for markets.”
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