PMI Is Flashing RED

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The Purchasing Managers’ Index (PMI) is an index of the prevailing direction of economic trends in the manufacturing and service sectors. It consists of a diffusion index that summarizes whether market conditions, as viewed by purchasing managers, are expanding, staying the same, or contracting.

The PMI is an accurate leading indicator on the state of the U.S. economy. It is released on the first day of the month after the survey was conducted. The purpose of the PMI is to provide information about current business conditions to company decision makers, analysts, and purchasing managers.

A PMI above 50 would designates an economic expansion and a PMI below 50 designates an economic contraction. The PMI is highly correlated with the S&P500.

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