Market Data 
- Dow Jones sheds almost a full percent, falls further away from 40,000.00.
- US Services PMI rose to a 12-month high, in a cautionary reminder of services inflation.
- Investors will be hoping for good news from Friday’s US Durable Goods Orders.
The Dow Jones Industrial Average (DJIA) tumbled on Thursday, falling -527 points and tumbling below 39,150.00 as investors pulled back in the face of declining hopes for a September interest rate cut from the Federal Reserve (Fed).
May’s S&P Global Services Purchasing Managers Index (PMI) rose to a 12-month high of 50.9 on Thursday, well above the forecast steady print at 50.0. Accelerating services activity bodes poorly for investors desperate for signs of a rate trim from the Fed. Fitch Ratings warned the entire market on Wednesday that services inflation will likely remain sticky for some time, keeping rates elevated for much longer than many investors have been hoping for.
Read more: US S&P Global Manufacturing PMI surprised to the upside in May
According to the CME’s FedWatch Tool, rate traders are pricing in barely 50% odds of at least a quarter-point cut from the Fed in September, down significantly from the 70% odds priced in at the beginning of the trading week. US data will have one last chance to throw investors a bone on Friday, with US Durable Goods on the table.
US Durable Goods in April are expected to decline -0.8% MoM, down sharply from the previous month’s 2.6%. The University of Michigan’s Consumer Sentiment Index in May is forecast to tick upwards to 67.5 from the previous period’s 67.4, while UoM 5-year Consumer Inflation Expectations are expected to remain pinned at 3.1% in May.
Dow Jones news
The Dow Jones is sharply lower on Thursday as the US market’s worst-performing equity index. All of the Dow Jones’ constituent securities are in the red for the day, with losses led by Boeing Co. (BA), which is getting absolutely shattered on Thursday. BA tumbled -6.75% to $173.68 per share after the company announced negative cash flow with no expectations of the battered airplane manufacturer’s deliveries recovering in the second quarter.
Dow Jones technical outlook
The Dow Jones sees accelerating losses as the index turns bearish, falling back from record highs above 40,000.00. Thursday has been incredibly one-sided intraday trading, tumbling from the day’s early peaks near 39,760.00.
The DJIA is slipping back towards the 50-day Exponential Moving Average (EMA) at 38,908.36. Despite near-term declines, the index is still buried deep in bull country, with the index trading well above the 200-day EMA at 37,141.05.
Dow Jones five minute chart
Dow Jones daily chart
Economic Indicator
S&P Global Services PMI
The S&P Global Services Purchasing Managers Index (PMI), released on a monthly basis, is a leading indicator gauging business activity in the US services sector. As the services sector dominates a large part of the economy, the Services PMI is an important indicator gauging the state of overall economic conditions. The data is derived from surveys of senior executives at private-sector companies from the services sector. Survey responses reflect the change, if any, in the current month compared to the previous month and can anticipate changing trends in official data series such as Gross Domestic Product (GDP), industrial production, employment and inflation. A reading above 50 indicates that the services economy is generally expanding, a bullish sign for the US Dollar (USD). Meanwhile, a reading below 50 signals that activity among service providers is generally declining, which is seen as bearish for USD.
Last release: Thu May 23, 2024 13:45 (Prel)
Frequency: Monthly
Actual: 54.8
Consensus: 51.3
Previous: 51.3
Source: S&P Global
