US: What has caused the sharp drop of the ISM index? – ABN AMRO
According to Han de Jong, chief economist of ABN AMRO, it is unclear whether the sharp fall in the ISM represents an actual deterioration of business conditions or a loss of confidence caused by the ongoing trade conflict with China and the government shutdown.
“The weakness of the stock market may also lead to pressure on the Trump administration to reach a deal with China. The talks between the two sides appear to be given more urgency now. The Chinese will be acutely aware that the stock market is putting pressure on Trump to end the conflict.”
“Economic indicators, as well as anecdotal evidence, are increasingly suggesting that the trade conflict is harming the US economy. As a result, domestic pressure to resolve the conflict will increase.”