The stock markets opened and traded in the red earlier today, but have climbed all the way back into the green.
At its low of the day, the Dow was down by 132 points.
Earlier, we learned that the ISM non-manufacturing index climbed to a six-month high of 55.2 in April.
“In our mind, any reading above 55 is a good one that bodes well for a continued expansion of the economy,” said Chris Rupkey of Bank of Tokyo-Mitsubishi. “The outlook cannot be questioned and the downside risks are minimal. Normal business risk taken on in a growing economy.”
While most ISM sub-indices climbed, the employment index fell noticeably to 51.3 from 53.6.
“If sustained at this level, the index would be consistent with private payroll growth trending at only 130K or so,” said Pantheon Macroeconomics’ Ian Shepherdson. “We hope this weakness is a hangover from the winter – before the weather hit, the index was consistently pointing to 200K-plus gains – but we can’t yet be sure.”
Ultimately, the full picture remains a positive one.
“At its new level, the ISM non-manufacturing index is consistent with GDP growth of about 2.5% annualised, but we wouldn’t be surprised to see it strengthen further over the next few months and we currently expect that second-quarter GDP growth will be as high as 3.5%,” said Capital Economics’ Paul Ashworth.
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