US MACRO: ISM NMI (Services) July 2017

US MACRO: ISM NMI (Services) July 2017

After confirming that the manufacturing business is still very strong (here) its now time to revise services with the NMI.

ISM NMI august 2017.PNG

NMI looks quite as positive as the PMI. Oscillating around the 55 points mark, this just means that services are in expansion and therefore they keep confirming the idea of a bullish macro environment.

Although it’s important to mention that for some months now Business Activity is showing lower readings than it used to. It’s still quite high but it could also mean a peak is coming.

Adding up to this, the last reading for New Orders and NMI (July 2017) is has been quite lower than desired. This should not make us panic, as the indicator is still expansive, but we should keep a close eye and be open minded about a possible peak in NMI.

In order to get more information about this let’s go and check the “what informants are saying” section:

respondents july nmi.PNG
There are two main ideas that I get out of this:
1) Some industries are experiencing what looks like an expected slowdown.
2) The rest of the industries remain in an ok to a good situation.

So taking all into account I believe we can conclude that NMI is signing a bullish market. And July’s low numbers shouldn’t be very important as they fit the seasonality of some businesses. As long as next month we see higher readings, everything should be fine from a services/NMI perspective. I’ll remain bullish for now.

Nuño Pérez del Barrio
Twitter: @nuopb



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