Wednesday 1 April 2015

DOW drop near to 200 points because of Chicago PMI! Note tomorrow ISM

Dear Friends,

Today DOW drop near to 200 points. As of now, 3.35am, DOW has already dropped 181 points. Today drop is because of an economical report called Chicago PMI, a report that studies the enterprises by interviewing the purchasers. It is a reflection on how the enterprises are.

Today actual results is 46.3 vs 52.5 forecast. Ouch, a big fall compared to the expectations! Please note that Chicago PMI has fallen below the 50 figure for 2 consecutive months. Falling below 50 is a sign of contraction.

Although this does not mean recession is coming, it means that enterprises are not doing that well this quarter.

Of course, some might argue that Chicago PMI is not the official report issued by the government as compared to the ISM, Institute of Supply Management.

But I think we should at least be cautious this quarter! If tomorrow's ISM also fall a lot below expectations, expect a backlash!

Let us keep a lookout on the ISM report on thursday. It will tell us a lot about the direction of April and May.


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