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Friday, April 23, 2021

Why do we need to analyse the ISM for our investments?

I've explained the ISM PMI relationship before.  Please see below.

http://sg-stock.blogspot.com/2019/04/the-us-economy-has-flipped-and-fissures.html

In economic terminology, the process is depicted as follow:
CPI/PPI->M1-M2 spread/3m-10y yield spread->PMI-> GDP

Let's take a look at the chart below.  The chart shows a high correlation between investment and ISM.  Therefore, it is imperative to analyze the ISM PMI to determine the investment trajectory.

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