Dow Jones Bounces Off Lows, Remains Under Pressure After US PMI
Virus Drags ISM Manufacturing New Orders to 11-Year Low
- ISM manufacturing PMI 49.1 versus expectations of 44.5
- New orders drops sharply as covid-19 crushes firm demand
- Markets now focus on Friday’s NFP report
Wednesday morning brought the release of the ISM manufacturing PMI survey for March with a print of 49.1, beating expectations of 44.5. The Dow Jones moved modestly higher following the reports release, however us equity indexes remain well in the red after Trump announced the country will see a hard two weeks from the impact of covid-19 on Tuesday night.
Dow Jones (1-Min Chart)
Source: IG Charts
Diving into the survey, new orders dropped to an 11-year low at 42.2, reflecting a step drop off in demand from firms. The dismal figure confirms that manufacturing activity in the United States took a hard hit as covid-19 spread throughout the country prompting many states to issue stay-at-home orders. One survey respondent in the report noted that “All North American manufacturing plants have ceased operations or drastically scaled back as a result of customer plant closing and other responses to COVID-19.”
The employment segment of the index also pointed to trouble in the sector with its employment index dropping to 43.8. This follows last weeks record breaking jobless claims figure. Markets now turn focus towards the upcoming non-farm payrolls report due out this Friday with expectations for the loss of 100k jobs.
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