US Recession Fears Abating As Services PMI Hits 51.4%
A recent uptick on a couple of market metrics has brought renewed hope to the US recession discuss especially after an earlier plunge in the stock market. Precisely, the US Services Index from the Institute for Supply Management (ISM) rose to 51.4% for the month of July. This marked the sector’s expansion for the 47th time in 50 months.
US Recession Fears Abated Per Service ISM And PMI Readings
The value of the ISM went above expectations of 51.0, in addition to positive moves in services employment and inventory. This result from July suggest a moderate rebound in the United States services activity last month. It is supported by a recovery in new orders from 47.3 to 52.5, increased business activity from 49.6 to 54.5 as well as a jump in order backlogs from 44 to 50.6.
Also, the S&P Global Services Purchasing Managers’ Index (PMI) came below July expectations last week. Service providers saw their employment levels move from 46.1 to 51.1, for the second time this year. This overshadows the weak jobs data released on Friday that ended up triggering concerns about the US economy heading towards recession.
Unfortunately, this fear of recession saw the stock market crash earlier in the day. The potential outlook of the economy has forced several investors to jump on a selling spree. Fort Washington Investment Advisors co-chief investment officer Chris Shipley shared his thoughts on the market outlook.
In Shipley’s opinion, the current downturn should not cause investor panic, citing that the market had “a certain vulnerability” due to expectations of economic growth and lower inflation.
Crypto Liquidation Hit $1B in 24 Hours
Similarly, Japan’s Nikkei crashed another 13% in the early trading hours on Monday. It is triggered more concern in the market and in no time, the crypto market began to bleed too. Crypto liquidation reach one of its highest levels in a long time.
Noteworthy, more than $1 billion exited the crypto market within the 24 hours. To break it down, $900 million of the liquidation is in long liquidations while $106 is in short liquidations.
The market valuation of most of the cryptocurrencies including Bitcoin price and that of Ethereum plunged significantly. Analysts came to the conclusion that Bitcoin is seeing its worst sell-off for the first time since Bahamian headquartered FTX imploded in 2022.
Read More: Polygon Price Analysis: Sharp 16% Drop in 24 Hours, What’s Behind the Decline?
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