I’ve hinted many times over the years that the most robust leading indicator is the ISM (Institute for Supply Management) manufacturing index. Last Friday, the report was – not surprisingly – dismal. May is likely to be even worse.
We’re also seeing the first (data) signs of the huge impact coronavirus is having on discretionary spending, and it’s not pretty. Yesterday the ISM published the non-manufacturing (or services) index. It’s the definitive end of 10 years of growth.
Despite the optimism still embedded in the stock market, Warren Buffett’s reluctance to throw money at it could prove to be brilliant. The prospect of a V-shaped recovery seems pretty remote – these leading indicators point to one ugly summer in economic terms and more data will simply mean more disappointment.