According to the Institute for Supply Management (ISM), the US Non-Manufacturing PMI for March fell to 52.5 points, which points to the weakest rate of expansion since August 2016.
Nevertheless, there is a silver lining in this report, which is that the recorded performance is far better than the 43.5 points that the consensus forecasts projected.
US Non-Manufacturing PMI. Image source: TradingEconomics.com
The services sector shrunk in March due to the economic fallout from the coronavirus outbreak and the government-imposed lockdown, which is exerting a heavy toll on the air travel and tourism industries.
These have seen the most considerable layoffs since the crisis started, as well as the biggest fall in an operational capacity.
Even still, the stock market maintained its positive outlook towards the end of last week’s trading session. The Dow Jones Industrial Average consolidated just above the 23.6 per cent Fibonacci Retracement level at 20900.0, which is a crucial support level.
The Bollinger Bands have contracted considerably into a narrow range, tightly encompassing the price action. This creates the so-called ‘Bottleneck’ effect, which anticipates a new surge in the price action once the new week’s trading session is opened.
DJI 1H Price Chart. Image source: Trendsharks ©, created with TradingView.com
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