Thursday, 1 October 2015

Some macro thoughts today

A few macro and related thoughts today...

PMI day #China - Caixin/Markit's purchasing managers' index for China's services sector fell to 50.5 in September from a reading of 51.5 in August. This is its lowest level since hitting 50 in July last year. There seems more attention however on the final reading on China's manufacturing PMI for September slightly higher to 47.2 from the initial "flash" reading of 47 released last week. “Tepid demand is a main factor behind the oversupply of manufacturing and why it has not recovered.”

(h/t @JohnKickLighter)

Recall that Hong Kong's Hang Seng, the Shanghai Composite and the Shenzhen Composite are closed today, so no immediate reaction here but elsewhere data appears to be taken it could have been worse.  

PMI day #other – South Korean manu PMI <50, Japan still >50 but both cite China as having a negative influence.  Tankan business survey in Japan mixed but generally had a gloomy outlook.  Indian manu PMI still >50 but at a 7 month low.
Early Eurozone PMIs - The manufacturing purchasing manager's index for Ireland, compiled by Investec and Markit Economics, was 53.8 in September, compared to 53.6 in August. Meanwhile Russia stabilises...many more out later. 

Lots of Q3 statistics - worst quarter on Wall Street since 2011...

...and fascinating to see since the August lows that health care and materials are juxtaposed next to one another...haven't seen that very often. 

(h/t @mcdonaldsarahj)

More Q3 data!  This time the super Bespoke key ETF data table.  Impossible not to find something interesting here...

Looking forward into Q4...

October an interesting month always!

As is the last day of Sept / subsequent Oct performance! 2008 or 2038 anyone?!

(h/t @RyanDetrick)

Euro zone in a ‘sweet spot’? - "The euro zone remains in a 'sweet spot,' benefiting from lower energy prices, a more competitive exchange rate and solid demand in the U.K and U.S.," Tom Rogers, senior economic adviser to the EY Eurozone Economic Forecast, said in a news release (link here). 

Still, IMF's Lagarde noted the Euro Area needs to fully tackle nonperforming loans worth some €900 billion and UK unemployment rate (5.5%) is exactly one half of the unemployment rate in the Eurozone (11%).  I would certainly argue not great...

A few more charts both from this excellent piece (link here)

Structural growth slowdown - 

FX – whose has fallen and whose has not?

Which economic statistics work? But look at those low R2s…so many none really!

 (h/t @NickatFP)

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