Chicago PMI Bounces But Remains Worst December Since 2015

The final macro datapoint of 2022 just printed and it was better than expected with Chicago PMI bouncing from 37.2 to 44.9 (considerably better than the 40.0 expected), but remaining deep in contraction territory…

This is the worst December print for the Chicago PMI since 2015…

Under the hood, the headline index rose despite only four components rising versus last month:

• Prices paid rose at a slower pace; signaling expansion

• New orders fell at a slower pace; signaling contraction

• Employment fell at a faster pace; signaling contraction

• Inventories fell and the direction reversed; signaling contraction

• Supplier deliveries rose and the direction reversed; signaling expansion

• Production fell at a slower pace; signaling contraction

• Order backlogs rose and the direction reversed; signaling expansion

Stocks stumbled in true ‘good’ news is ‘bad’ news fashion…

But we suspect the 3835 level for the S&P 500 will prove critical today.