This morning's release of the Philly Fed Manufacturing report for the month of May pretty much erased all hopes of a market rally. With economists expecting a level of 10.0, the actual reading was not only weaker but it was also negative (-5.8). As shown in the table to the right, the weakness was pretty much across the board as six out of nine sub-components came in at negative levels.
The charts below show charts of the headline Philly Fed report and each of its subcomponents going back to 1980 with recessions highlighted in gray. As shown, this month's negative reading in the headline index was the first negative reading of the year and the lowest reading since September.
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