With purchasing manager survey data bolstering a bullish outlook and the Federal Reserve revealing a hike in interest rates is still far off, stocks closed at a record high for the third straight week.
The indexes of both monthly surveys of corporate purchasing managers at large businesses fell, but they were coming off record highs. With these indexes administered by the Institute of Supply Management, a reading greater than 50 indicates business expansion, and less than 50 indicates that business is contracting.
The monthly manufacturing sector survey has been conducted for decades and the reliability of the index has been tested over a long time. While the service sector survey index data only goes back to 2008, it uses the same methodology as the manufacturing sector survey. The service sector of the U.S. economy accounts for 89% of the U.S. economy and 91% of employees, making it the more important of the two indexes.
The other influential data released this past week were the minutes of the interest rate policymaking committee of the Federal Reserve Bank. Here are the most important 83 words of the 8,774-word minutes from the two-day meeting of the nation’s central bankers:
“All members reaffirmed that, in accordance with the Committee’s goals to achieve maximum employment and inflation at the rate of 2% over the longer run and with inflation having run persistently below this longer run goal, they would aim to achieve inflation moderately above 2% for some time so that inflation averages 2% over time and longer-term inflation expectations remain well anchored at 2%. Members expected to maintain an accommodative stance of monetary policy until those outcomes were achieved.”
The Standard & Poor’s 500 stock index closed today at an all time high of 4,369.55, gaining +1.13% for the day. The index gained just +0.39% from last Friday’s close. Since the March 23, 2020, bear market low, the value of the S&P 500 is up +64.54%.
Nothing contained herein is to be considered a solicitation, research material, an investment recommendation, or advice of any kind, and it is subject to change without notice. Any investments or strategies referenced herein do not take into account the investment objectives, financial situation or particular needs of any specific person. Product suitability must be independently determined for each individual investor. Tax advice always depends on your particular personal situation and preferences. You should consult the appropriate financial professional regarding your specific circumstances.
The material represents an assessment of financial, economic and tax law at a specific point in time and is not intended to be a forecast of future events or a guarantee of future results. Forward-looking statements are subject to certain risks and uncertainties. Actual results, performance, or achievements may differ materially from those expressed or implied. Information is based on data gathered from what we believe are reliable sources. It is not guaranteed as to accuracy, does not purport to be complete, and is not intended to be used as a primary basis for investment decisions.
This article was written by a professional financial journalist for Advisor Products and is not intended as legal or investment advice.