MainStay Market Minute: Positive Signs from the Manufacturing Sector

NEW YORK - May 18, 2016 - PRLog -- With many investors turning to the equity market in an attempt to build wealth, Poul Kristensen and Charles Reinhard, Managing Directors for New York Life MainStay Investments discuss the positive outlook for the sector, as potential correlations are drawn between the manufacturing sector and its impact on stocks.

According to Poul, while the US Purchasing Manager Index (PMI) bottomed in December 2015, current data suggests that we are now in an upcycle, as the leading indicator (the new orders component) shows signs of being on the rise.  A second source of data that Poul points to is the China Purchasing Managers Index.  While China's bottom was in February, they are also showing current signs of being in an upcycle.  With the combination of US and China, two of the world's largest economies both showing signs of improvement, there is a positive indication that this trend will continue.

Charles supports this outlook with data from the S&P 500.  According to Charles, the S&P 500 Index has historically performed better when the PMI was on the rise.  "Rising PMIs are consistent with profit growth and analysts now expect S&P 500 profits to grow in the second half of this year and into next," Charles explains.

But past performance and current data are not the only contributing factors to this positive outlook.  As Poul explains, another constructive element is investor sentiment.  "The May 11^th reading of the American Association of Individual Investors shows just 20% as being bullish," Poul reports.  But while this may seem like a bad sign, Poul states that low levels of investor optimism can be viewed as potentially constructive, as there is more room for sentiment to rise than fall when starting from already low levels.

To watch this interview and future updates from New York Life MainStay, tune into Asset TV's New York Life MainStay Investments Channel Page: http://bit.ly/1Tkpl0C

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