Each month, the Institute for Supply Management (ISM) each month generates the Services Purchasing Managers Index (PMI), aggregating monthly inputs from purchasing and supply executives in services firms across the U.S. regarding business activity, new orders, employment and supplier deliveries. ISM releases Services PMI for a month on the third business day of the following month. Does the monthly level of Services PMI or the monthly change in Services PMI predict U.S. stock market returns? Using monthly seasonally adjusted Services PMI data during January 2008 through January 2016 from the Federal Reserve Bank of St. Louis and from press releases thereafter through August 2023, and contemporaneous monthly S&P 500 Index closes, we find that:
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