German industry gains momentum in October and purchasing index rises to 54.2
Final reading confirms the preview and maintains activity above 50, a range that signals expansion, according to InfoMoney.
BY THE X-TRADER NEWS NEWSROOM · REPORTING FROM INFOMONEY · 2 MIN
German industrial activity gained momentum in October. According to InfoMoney, the sector's purchasing managers index, known by the acronym PMI, rose to 54.2 points, compared to 53.9 in September. The number remains above 50, a level that, in the reading used by the report, indicates expansion of industrial activity.
The final data was released on Monday, 2, by S&P Global in conjunction with Hamburg Commercial Bank. As this is the definitive version, the issue eliminates doubts about the preliminary reading, which had already been anticipated.
The result was also in line with projections. The report informs that the reading confirmed the FactSet consensus, that is, there was no relevant deviation from what the market expected.
The increase of 0.3 points seems modest, but it has weight because it keeps the indicator in expansion and points to an increase in relation to the previous month. In an environment where investors are looking for signs about the pace of the economy, activity indicators gain space in the formation of expectations about interest rates and company profits.
In the liberal reading that guides this newspaper, positive data from the industry is a reminder that production responds better when the business environment offers predictability. Still, a single month does not define a trend, and what is important is to check whether the expansion is repeated in the next releases.
What changes for the investor
For those who invest, industrial indices above 50 are usually observed by companies linked to the economic cycle, exporters and sectors sensitive to orders. A rising reading can reinforce the perception of demand, but the effect on the stock market depends on how interest rates, the dollar and profit expectations react in the following weeks. This article does not provide price projections or buy or sell recommendations, and it is worth following the next readings before drawing conclusions.
Automatically translated from Portuguese.
