Posted on 09/01/2014 10:00:56 AM PDT by blam
Tyler Durden
September 1, 2014
If last week's disappointing global economic data, that saw Brazil added to the list of countries returning to outright recession as Europe Hamletically debates whether to be or not to be in a triple-dip, was enough to push the S&P solidly above 2000, even if on a few hundreds ES contracts (traded almost exclusively between central banks), then the overnight massacre of global manufacturing PMIs - when not one but both Chinese PMIs missed spurring calls for "more easing" and pushing the SHCOMP up 0.83% to 2,235.5 - should see the S&P cross Goldman's revised year end target of 2050 (up from 1900) sometime by Thursday (on another few hundreds ES contracts).
Some of the highlights, or rather lowlights: Dutch PMI 51.7, down from 53.5, Hungarian PMI 51.0, last 56.7; Spain PMI 52.8, Exp. 53.3, Last 53.9; Czech PMI 54.3, Exp. 55.5, Last 56.5; Swiss PMI: 52.9, Exp. 53.7, Last 56.5; Sweden PMI 51.0, Exp. 54.8, Last 55.1; Italy PMI 49.8, Exp. 51.0, Last 51.9 (back into contraction mode to go along the GDP decline and the record low inflation), French PMI 46.9, Last 46.5, Germany 51.4, Exp. 52.0, and Last 52.0 and finally the UK at 52.5, exp. 55.1, and last 54.8, was the lowest reading since June 2013.
Some more observations from Goldman: on Europe's absolute manufacturing disaster:
The Euro area final manufacturing PMI printed at 50.7 in August, 0.1pt below the Flash and the consensus estimate (Flash, Cons: 50.8). This implies a 1.1pt contraction from the July print. The French component was revised up relative to the flash (+0.4pt), while the German component was revised down (-0.6pt). The August figure in both Italy and Spain showed continued loss of momentum, with the manufacturing PMI easing 2.0pt in Italy and 1.0pt in Spain
(snip)
(Excerpt) Read more at zerohedge.com ...
Germany takes a beating because they decided to implement green electricity (read costs double) where French nuke plants churn out stably priced electricity.
German businesses are afraid to expand, margins have shrunk, purchasing expectations down.
“German businesses are afraid to expand,”
Oh, they have no problem with expanding at all.
Just not in Germany.
So the Purchasing Manufacturer’s Index is down encouraging a lower interest rate and probably a continuance of QE and the market is up?
The outlook is bad and the market is up? So this is all a house of cards again?
OK. Makes perfect sense. You can’t give money away to encourage growth. Seems a demographic thing to me. No need for increased capacity since there are no buyers.... the rich have already moved all the disposable income over to their side of the ledger. Most people are on subsistence wages or the dole.
I read the article the other day beating up on oil companies for adding to debt. With rates so low that is what the smart money is doing if they have a place to employ capital.
If I planned on working longer I would go out and borrow to the hilt.
I wish these market boffins would speak in plain language instead of a bunch of insider acronyms.
GREAT picture! The van with a flat in the left rear was an excellent symbolic touch!
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