Historic Market News

An important gauge of the U.S. services industries beat market expectations last week and recorded its highest reading in over 20 years.  Last Wednesday, the Institute for Supply Management’s (ISM) Non-Manufacturing Index checked in at 61.6 for September 2018, its highest level since August of 1997. A value above 50 indicates overall expansion in the services sector, while value below 50 indicates economic contraction.  The index is compiled from data obtained from a survey of executives in over 62 industries related to the consumer services sector.  Responses indicated broad-based gains in all of the major components – Business Activity, New Orders, Employment, and Supplier Deliveries – of the survey for a sector that accounts for more than 75% of all U.S. employment.  The Backlog Orders sub-index also increased, indicating that companies were struggling to keep pace with new orders.

Now, stocks suffered last week, and the decline was attributed to several factors: a sudden jump in bond yields, increasing oil prices, uncertainty about the new Italian government’s economic policy, and concerns about Chinese espionage in the global computer hardware supply chain. With all of this doom and gloom in the financial headlines, it can be important to point out that most of the current economic data releases continue to show that the U.S. economy remains on very firm footing.