By Greg Peel
The Dow rose 18 points, or 0.1%, while the S&P was flat at 1460 and the Nasdaq lost 0.2%.
My editor informs me there is much confusion in the market about how a purchasing managers' index (PMI) actually works. I have touched on this many times before, but I will reiterate today following releases over the past 24 hours of flash estimates of September manufacturing PMIs from China, the eurozone and the US.
- FOLLOW IBTIMES
The change in a PMI from month to month represents movement in the rate of change of expansion/contraction of the sector, with 50 being the point of zero change. A number above 50 means the sector is expanding. The higher that number is above 50 the faster that sector is expanding, from last month to this month. A number below 50 means the sector is contracting. The lower the number below 50, the faster the rate of contraction.
Think of a car going either forward or in reverse. If the PMI rises from 51 to 54 that car is going forward and has hit the accelerator pedal. If the PMI falls to 51 from 54 that car is still going forward but is on the brake pedal. If the PMI falls
Copyright FNArena All rights reserved.