*Some terminology:
- US Purchasing Managers' Index (PMI) - a measure of business activity.
- DGS 1&5 - Average yield of 1-year and 5-year US Treasury bonds.
- Federal Reserve Funds Rate - The interest rate at which U.S. banks lend their excess reserves to other banks on a short-term basis.
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1/ Pay close attention to the US Purchasing Managers' Index (USCPMI), which can indicate whether the economy is recovering from the epidemic. The current value is the lowest since May 2020, and an increase will be a positive sign.
2/ Pay attention to the Federal Reserve's Federal Reserve Funds Rate (FEDFUNDS). If it starts to lower interest rates, this is a very positive signal for the market.
3/ Watch the DGS 1/5 (1-year to 5-year U.S. Treasury yield spread), when it falls to the spring 2020 level, it may indicate that the market is stabilizing and returning to pre-pandemic levels.
Be patient and vigilant in making trading decisions.