Sentiment in US industry is rising more than expected - but analysts continue to see a lack of positive momentum.

Sentiment in US industry is rising more than expected - but analysts continue to see a lack of positive momentum.

According to a report by www.boerse.de, sentiment in US industry improved more than expected in January. The Purchasing Managers' Index ISM rose from 47.1 points in the previous month to 49.1 points. Analysts on average had expected an improvement to 47.2 points. Nevertheless, the indicator remains below the 50 point threshold, indicating a shrinking industry.

The values ​​for prices paid and new orders have increased significantly and are above the growth threshold. On the other hand, the employment indicator has clouded over and signals a slowdown. According to Ulrich Wortberg, analyst at Landesbank Hessen-Thüringen, despite the improvement, positive dynamics in the sector are still a long way off. In contrast, the service sector helped protect the US economy from recession last year, although this sentiment index has recently shown a trend of weakness. Based on today's data release, the interest rate cut fantasy should tend to be dampened, according to Wortberg.

The more positive development in US industrial sentiment could have an impact on the market. A strengthening of the industry could lead to investors investing more in industrial companies again. In addition, rising industrial sentiment could increase expectations for economic performance in the USA, which could have a positive impact on the stock market. However, industrial sentiment, which remains below the 50-point mark, could continue to cause uncertainty and reluctance among investors. It remains to be seen how the indicators will develop in the coming months and whether the dynamics in US industry will continue to improve.