Chart of the Day
One positive for the stock market has been a very positive earnings environment. Today’s chart illustrates an adjusted Institute for Supply Management (ISM) Purchasing Managers Index (PMI) or Chart of the Day (COTD) PMI. The purpose for adjusting the inputs of the PMI is to better emphasize those components that correlate with the financial markets. Today's chart illustrates how the COTD PMI has tended to peak 12 months before S&P 500 earnings. The supporting logic for this phenomenon is that a surging economy puts upward pressure on inflation and interest rates, which can then negatively impact corporate earnings. Today's chart illustrates that the COTD PMI peaked 12 months ago. Stay tuned...
- The ISM PMI is a composite index based on the seasonally adjusted diffusion indexes of five major indicators including: new orders, production, employment, supplier deliveries, and inventory levels.
- For more on on the COTD PMI, earnings, and how it all relates to the market, subscribe to Barron's recommended Chart of the Day Plus.
Source - ISM
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Quote of the Day
"Though this be madness, yet there is method in it." - William Shakespeare
Events of the Day
January 16, 2005 - Golden Globe Awards
January 17, 2005 - Martin Luther King Jr. Day (observed) - Australian Open Tennis Tournament begins (ends Jan. 30th)
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