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Every month the Institute for Supply Management releases its survey of purchasing managers for roughly 300 manufacturing firms across the U.S. This purchasing managers' index (PMI) is one of the key pieces of data investors see each month. The ISM will release May's survey next Friday, June 1.
But beginning Thursday, an earlier version of the monthly PMI will be put out by Markit Group. The financial information services company is releasing its first U.S. manufacturing PMI. It already does PMI surveys for Europe and Asia.
What the Markit PMI will lack in historical data, it could make up for in timeliness. Investors are certain to start using it each month as a harbinger for ISM's survey.
Markit says its new monthly survey will be even more than that. The firm says its U.S. PMI will be the earliest available indicator of business conditions across the U.S. manufacturing sector, and in conjunction with Markit's China and euro zone PMIs it will provide "the first snapshot of global manufacturing operating conditions every month."
So what's at stake tomorrow? Barry Knapp, of Barclays Bank PLC, warns that if the data fail to live up to expectations, earnings growth forecasts for the second half of the year will be called into question.
"If the results of Thursday's Global flash PMI releases disappoint, they would pose a risk to the consensus earnings growth rates that suggest a [second half]recovery; the consensus view has already been called to question in recent company commentary," he wrote in a research note Wednesday.
"Disappointing releases would likely lead to further deceleration in forward earnings growth expectations. Although the market has discounted lower growth expectations over the past month, with the S&P 500 at 1315, we believe downside risks to earnings expectations remain; particularly, if the release confirms a deceleration in the US outlook," Mr. Knapp said.
There are no forecasts for the Markit survey yet. But the ISM survey on June 1 is expected to decline to 54.3, from April's 54.8 (a reading of 50 or less indicates that the manufacturing sector is contracting).