Stocks Decline as New Quarter Begins in the Stock Market

Stocks Decline as New Quarter Begins in the Stock Market

The U.S. manufacturing sector is in its strongest position since 2022, according to two reports released Monday.

The Institute for Supply Management manufacturing PMI index reported that the manufacturing sector expanded for the first time since September 2022 in March, while an S&P Global measure showed output hit a 22-month high last month as the The US economy continues to impress.

The ISMs manufacturing PMI index recorded a reading of 50.3 in March, up from February’s reading of 47.8 and higher than the 48.3 expected by economists, according to Bloomberg data.

The March figure marks the index’s highest since September 2022 and is the first time manufacturing activity has increased since October 2022. Figures above 50 for this index indicate an expansion in activity while Numbers below 50 indicate contraction.

“Demand was positive, production strengthened and inputs remained accommodative,” Timothy Fiore, chair of the ISM Manufacturing Survey Committee, said in the company’s statement.

This could especially be a welcome sign for stocks. An uptick in manufacturing was highlighted by Wall Street strategists looking for further signs. the widening of the stock market rally has more space to run.

“We see continued signs of an upcycle in manufacturing, signaling the end of the third longest manufacturing downturn in history,” wrote Ohsung Kwon, U.S. and Canadian equity strategist at Bank of America, in a note to to its customers last month.

“Inventory levels have only just returned to normal, a restocking cycle could be next, and early indicators suggest a manufacturing upcycle ahead. Historically, when the manufacturing PMI was expanding, S&P 500 EPS increased by an average of 12% year over year. on a rolling basis (12 months).

Kwon’s team at Bank of America noted the turnaround while raising its earnings forecast for the S&P 500 this year to $250 from $235.

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