US economic growth has downshifted lately, but only moderately so, according to this morning’s flash estimate of the Services PMI data for September. Markit’s sentiment benchmark for the sector, which represents the dominant slice of US economic activity and payrolls, dipped to 55.6 in this month’s initial reading from 56.1 in August. But that’s still a solid pace and is well above the neutral 50.0 mark that separates growth from contraction. In short, the Services PMI suggests that the US macro trend is still positive.
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Avoiding a hefty drawdown is a high priority for every investment strategy, but monitoring the history of decline from previous peaks is a valuable indicator for deciding if a given market has crossed the Rubicon into bear-market territory. Minds will differ at the moment on the subject of US equities, in part because the S&P 500’s one-year loss is a relatively mild 3.3% slide as of Sep. 24. But drawdown data is painting a darker profile for the US stock market.
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● US durable goods orders slump 2% in August–first drop in 3 mos. | MarketWatch
● US jobless claims up 3k last week to still-low 367k | Bloomberg
● Chicago Fed Index: US growth at slightly above-trend pace in Aug | Chicago Fed
● US new home sales rise 5.7% in Aug to post-recession high | WSJ
● US Consumer Comfort Index rises the most in 3 months | Bloomberg
● US KC Fed Mfg Index posts slower rate of decline in Aug | 24/7 Wall St
● Eurozone lending up, M3 money supply pace falls in Aug | Reuters