Manufacturing PMI stays within the realm of contraction

1. Manufacturing PMI increased from 47.9 in August to 48.9 in September.

2. Services PMI decreased from 50.5 to 50.2.

3. Composite PMI dropped from 50.2 to 50.1.

On September 22, S&P Global published preliminary PMI reports for September, which revealed a mixed picture for the US economy. Manufacturing PMI improved from 47.9 in August to 48.9 in September, but remained below the analyst consensus of 48, indicating a continued contraction in the sector.

However, the Services PMI declined from 50.5 to 50.2, contrary to analysts' expectations of a rise to 50.6. Consequently, the Composite PMI dropped from 50.2 to 50.1 due to the slowdown in the services sector, but it still remained in positive territory.

S&P Global noted that US businesses experienced a general stagnation in output at the end of the third quarter due to subdued demand conditions in both manufacturing and services.

September's performance data across the private sector was the weakest since February, as reported by S&P Global. This led to a downward movement in Treasury yields following the release of the PMI reports, with bond traders taking profits.

The reaction to the PMI reports also impacted the US Dollar Index, which retreated from session highs as traders engaged in profit-taking, exerting downward pressure on the American currency.

Traders' attention to the weaker dollar and declining Treasury yields contributed to gold settling above the $1925 level.

Conversely, the SP500 showed upward movement with some traders betting on a rebound after a significant pullback, although this recovery was relatively mild. It is worth noting that weak economic data is currently seen as positive for stocks, as the market closely watches the Federal Reserve's policy outlook.