US ISM Manufacturing preview: Index to remain near the 55 mark - Wells Fargo

On Monday, the key economic report in the US will be the ISM manufacturing index. According to analysts from Wells Fargo, it will remain around the 55 mark; last month it stood at 54.9

Key Quotes: 

“The ISM manufacturing index has hovered just shy of 55 over the past two months, a modest pullback from levels seen in Q1. The new orders and production components were a solid 59.5 and 57.1, respectively, in May, but both of these readings were below their six-month averages. This softening in new orders and production has corresponded with a deceleration in the hard data for capital goods orders. Encouragingly, after seven straight months of sub-50 readings for the backlog of orders component, this measure of activity in the pipeline snapped the streak in February and has held steady in the mid-50s since.”

“We expect the ISM index to remain near the 55 mark in June. While this is lower than the robust readings registered to start the year, it is still consistent with incremental improvement in the manufacturing sector relative to the past couple years; the ISM index remained below the 55 mark for all of 2015 and 2016.”