Are the Economic Fundamentals Bullish or Bearish for the S&P 500?

There is a remarkably close fit between the yearly percent change in the S&P 500 stock price index and the national manufacturing purchasing managers index (M-PMI). The latter is available only through April; the reading for May will be released next week, on Wednesday, June 1.

However, the M-PMI is highly correlated with the general business indexes of the regional business surveys compiled by the Federal Reserve Banks of NY, Philly, KC, Richmond, and Dallas. Four of them are available so far for May, and they suggest that the M-PMI—which was 55.4 in April—fell sharply closer to 50.0 in May.