ISM/PMI Services Indicators turn down unexpectedly. Remember, we are a service economy and the stimulus is starting to wear off.
Stocks are trading off, but the big move is in bonds. 10 year Treasuries have fallen to 1.36%; no worries of inflation here, contrary to the narrative.
While we tend to focus on the manufacturing signals for indications of growth, as a service economy we must also focus on the changes in service indicators. This slowdown in service spending contradicts the original narrative: “As the economy opens, service spending will improve dramatically.” These surveys indicate that for the broad economy, services did ok during the pandemic and are slowing along with manufacturing as stimulus spending ebbs.
Robert Lloyd, CFA®
Chief Investment Officer
Lloyds Intrepid Wealth Management
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