The final macro datapoint of 2022 was better than expected with Chicago PMI bouncing from 37.2 to 44.9 (considerably better than the 40.0 expected), but remaining deep in contraction territory...

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This is the worst December print for the Chicago PMI since 2015...

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Under the hood, the headline index rose despite only four components rising versus last month:

• Prices paid rose at a slower pace; signaling expansion
• New orders fell at a slower pace; signaling contraction
• Employment fell at a faster pace; signaling contraction
• Inventories fell and the direction reversed; signaling contraction
• Supplier deliveries rose and the direction reversed; signaling expansion
• Production fell at a slower pace; signaling contraction
• Order backlogs rose and the direction reversed; signaling expansion

Stocks stumbled in true 'good' news is 'bad' news fashion...

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But we suspect the 3835 level for the S&P 500 will prove critical today.

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