The ISM manufacturing index for December came out worse than expected, falling from 59.3 to 54.1, against market expectations at 57.5. The main sub-indices also posted a strong decline. The new-orders index fell from 62.1 to 51.1, a very strong decline that anticipates a continuation of the negative trend of the headline index also in January. The employment index fell from 58.4 to 56.2, in line with a weakening of the labor market in early 2019. The decline of the ISM manufacturing index is a negative indication for the U.S. economic outlook, even if remaining above 50 it is in line with an expansion of economic activity. As indicated by the following charts, the decline of the ISM manufacturing index is also a negative sign for the S&P500.