The S&P 500 is currently experiencing mixed signals from the latest PMI data, which reveals a divergence between the manufacturing and services sectors. The manufacturing PMI has dropped to 48.3, indicating ongoing contraction, while the services PMI has surged to 58.5, its highest level since 2021. This disparity highlights a manufacturing sector that continues to struggle, contrasted by a services sector gaining momentum. Despite the robust activity in services, employment indices show only modest expansion, raising concerns about the sustainability of this growth. Citi analysts express caution, pointing to potential labor market weakening and structural factors such as modest rent inflation and slowing wage growth. Additionally, disinflationary trends in services suggest that inflation may ease further, adding another layer of complexity to the economic outlook.
The Invesco S&P 500 Equal Weight ETF (RSP) saw a slight increase, rising 0.08% to $182.30 as of 12:00 PM on Monday, December 16.