ISM Manufacturing Index PMI: Backtest Insights

Introduced by the ISM in 1948, ISM Manufacturing Index, or PMI, is a useful resource for assessing the health of the US manufacturing sector. It is one of the key macroeconomic indicators financial market traders monitor on economic calendars because of the impact it can have on various financial markets. Unexpected results can move different markets, including stocks, indexes, and currencies. Let’s take a look at the ISM Manufacturing Index.

The ISM Manufacturing Index, or PMI is an important indicator of the health of the US manufacturing sector. The index is based on a survey of manufacturing purchasing managers and measures factors such as production, new orders, employment, and supplier deliveries. A reading above 50 indicates that the manufacturing sector is expanding, while a reading below 50 indicates that it is contracting.

In this post, we answer some questions about the ISM Manufacturing Index trading and investing strategy, plus backtesting.