Posts Tagged ‘ PMI ’

Eurozone PMI – Continues to Slow as Europe Bickers

October 25, 2011
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Eurozone PMI – Continues to Slow as Europe Bickers

Economies don’t function well in a “crisis steady state”. In Europe, the business environment has been surprisingly good during the third quarter despite what seems like a concerted effort to induce a collapse. A number of consumer and industrial companies pointed out that growth hasn’t fallen off a cliff and if Europe can simply instill some confidence business could pick up. Unfortunately, Europe seems intent on going at its own pace, and not treating the current financial crisis, well, like a crisis. The longer the “fix” gets dragged out, the greater the odds that the Eurozone leaders talk the region into a recession. A recession is massively counterproductive to solving Europe’s fiscal woes because it creates the need for more austerity and more spending cuts. It is not difficult...

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China PMI – No Evidence of a Hard Landing

October 2, 2011
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China PMI – No Evidence of a Hard Landing

China’s official PMI was released over the weekend (after financial markets closed on Friday) and the September data point came in slightly higher than last month and slightly higher than expected. The total manufacturing PMI index came in a 51.2 which is the strongest month of the past 4-months. As important as the slight uptick, the gains were broad with improvements in the key categories. Total PMI rose to 51.2 (50.9 in Aug) Output rose to 52.7 (52.3 in Aug) New Orders rose to 51.3 (51.1 in Aug) Export Orders rose to 50.9 (48.3 in Aug) Backlogs rose to 48.9 (47.6 in Aug) Employment rose to 51.0 (50.4 in Aug) In short there was some modest yet broad improvement. While a PMI reading of 51.2 is weak for China,...

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China Hard Landing Fears – The Reality and The Preposterous

September 30, 2011
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China Hard Landing Fears – The Reality and The Preposterous

Slowdown fears in the market have shifted to China. The past two days has seen the start of a shift in sentiment with China exposures viewed more as risk than as opportunity. There is clearly some slowing in China, and there should be, because the government has been trying to slow the economy to help contain inflation for the past year. China starting to slow is a positive because it helps inflation remain under control which is a key element towards China achieving its multi-year economic plans. Over the latter half of this week, the fear has shifted that the slowdown is no longer orderly and that it is accelerating towards a hard landing in China. If this were to be true, it would dramatically increase the chances of...

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Europe’s Minimalist Approach Is the Wrong Course

September 22, 2011
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Europe’s Minimalist Approach Is the Wrong Course

What an 18 hours, as a conflux of negatives weigh on the market. In wrenching fashion, the US markets are down 6% since yesterday at 2:00pm. Most international markets around the world are down significantly more. Many emerging markets are off over 10% over two days. The Fed implemented Operation Twist yesterday, and the size and scope was actually greater than expected. The US Fed is not the crux of the current set of global financial problems, nor is it reasonable to expect that the Fed can fix things. I have highlighted previously that Europe has the capacity to avoid a full blown financial crisis by taking decisive actions. Unfortunately, Europe’s hard stance with respect to minimizing backstops, bailouts, the EFSF, coupled with a cavalier approach towards the French...

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