The Latest Round Of Manufacturing Data Is A Good Sign For S&P 500 Earnings Growth

Last week, RBC Capital Markets' Myles Zyblock upgraded the S&P 500 to "overweight."

One big reason for this was the upturn in manufacturing data.

"[Last] week’s ISM Manufacturing and global PMI data showed improvement, with both moving above their breakeven level of 50," wrote Zyblock. "These developments suggest that S&P 500 earnings growth, which has effectively flat-lined on a year-over-year basis, should pick up pace in the first half of the new year."

Here's a cool chart that shows a tight correlation between global PMI and earnings revisions.

RBC Capital Markets