This page has been archived and commenting is disabled.
A Look At Futures Action: A Weak Seasonally Adjusted Chinese And European PMI, First Negative 2010 ADP, And More
A weak seasonally adjusted PMI number out of China did nothing, as expected, for Chinese stocks, but was enough to push US futures up an entire point overnight, as any data now is enough to send the computers into a feeding frenzy. Additionally the trend of declining European data continues, with an even starker contrast between core and the periphery: EU PMI came in at 55.1 compared to 56.7 previously and the lowest since February 2010, yet what is interesting is that German PMI came on top of expectations (and again the lowest since february at 58.2), while Italy missed by a mile at 52.8 on expectations of some growth from the previous print of 54.5. As for Greece - forget about it: its PMI was 43, compared to 45.3 in July, on steep falls in output and new orders, as austerity continues to extract its pound of flesh. Yet it is all about the AUDJPY, which at least up until the completely worthless and irrelevant ADP report came in at -10,000 on expectations of +17,000 (and, gee, the previous was again revised lower from 42k to 37k, hopefully this is not an indicator of what to expect this Friday, as this was the first decrease in private payrolls since January 2010) was up by about 150 pips. So why is the AUDJPY flying? In addition to some better than expected Aussie GDP data, which is nothing but a second derivative on the Chinese economy, one should actually ask the forward looking question: what is really going on in China? And here is Goldman explaining why the Chinese PMI number, despite what Doug Kass would like to tweet, actually confirms an ongoing slow down in mainland China.
From Goldman Sachs Global ECS Research:
China’s official Purchasing Managers’ Index (PMI), co-compiled by the National Bureau of Statistics (NBS) and the China Federation of Logistics and Purchasing (CFLP), rose to 51.7% in August from 51.2% in July.
Despite the fact that it is claimed to be seasonally adjusted, historical headline PMI data showed clear seasonality. Its August readings tend to be higher than its July readings. After adjusting for this seasonality, the PMI was largely flat in August (down by less than 0.1 percentage point).
Among the sub-indices of the PMI (data mentioned below are after re-adjustment for seasonality, see Exhibit 3 for full breakdowns):
- The production sub-index fell to 54.8% in August from 55.4% in July.
- The new orders index rose to 55.0% in August from 53.9% in July.
- The new export orders index remained unchanged at 51.6%.
- The imports index was down to 49.1% in August from 50.9% in July.
- The employment sub-index went down to 50.8% in August from 51.5% in July.
- The input price sub-index continued to rise to 57.8% in August from 49.4% in July.
- The raw materials inventory index fell to 47.7% in August from 48.1% in July.
- The finished goods inventory index, which is a reverse index that tends to fall when the growth accelerates, fell by 1.4 percentage point.
Takeaways:
The August PMI headline reading suggests manufacturing activity growth remains significantly below its trend level (though there is no major further slowdown like the one that happened in late-2008). The further moderation in the production and imports sub-indices also suggesting actual growth continued to be weak in August. However, 1) the seasonality of the official PMI is not necessarily consistent which means we cannot fully rely on the PMI in judging the strength of activity growth. Other more anecdotal information seems to be more encouraging (e.g., the pace of investments especially in inland provinces probably accelerated. Though this information need to be treated with a big grain of salt too). We need to see industrial production (IP) data, which is due September 13, to get a better sense about actual growth in August. If IP data does confirm the continued weakness as suggested by today’s PMI data, we see more downside risks to our 10.1% 2010 GDP growth forecast. 2) The new orders sub-index started to improve modestly which may signal a rebound in activity growth in the near future. Interestingly, despite heightened concerns about growth in many parts of the world, the export new orders sub-index has not shown any clear downward trend since March.
Also worthwhile noting is the dramatic rebound in the input price index in August. This rebound is consistent with the rise in domestic commodity prices in recent weeks, especially in terms of steel prices, and may translate into a rebound in sequential PPI inflation with a short lag (typically a month). Higher inflation (CPI is also expected rise in August judging from the high frequency food price data compiled by the ministries of agriculture and commerce) may further complicate policy making as policy makers may feel it is difficult to loosen policy to stimulate growth. However, we expect the strength in inflation data to be temporary and by 4Q2010 the growth-inflation combination will likely to be one with lower yoy growth and falling inflation which will push policy makers to (quietly) loosen policy further. If a more-thanexpected slowdown in exports growth occurs in the coming months, a more decisive stimulus package will be needed and likely adopted.
»
- 4714 reads
- Printer-friendly version
- Send to friend
- advertisements -
Pay no attention to the mad buy monkeys behind the curtain.
Market going to close at 1300 today? This is getting blatently obvious that it is not real money buying up these futures. Someone please unplug 33 Liberty's data lines, kthnksbie.
Our markets have become so fradulent it's rediculous. Tyler is spot on, it's seems any data, bad data rives us north. How long can this game go on for? All the data gets revised downward and no one cares. What else can you say about the markets other than they are disconnected from reality.
Ahh, see that is where you are wrong. People do care, it is the Fed that doesn't care about revised data. They feel that pump this market regardless of what reality is at this point. Even that farce of a Fed Greenspan said that the Fed's need to drive the markets higher to get people into the market. The problem is that Greenspan is a moron of epic proportions, and that people are starting to catch on to reality. The only thing driving the market north is 33 Liberty and nothing more.
The lie is so huge now that they have no other choice but to perpetuate it further and stronger.
Kind like Bernie Madoff...
Bernie was better at it.
the market is the fed s/TBTF play thing and tool - little or no relation to economy.
Chart: ES
Be short, be happy.
http://www.screencast.com/t/YWUwYTYyYTg
Love that triple test of 1040 in the chart. 4th time a charm?
Nope. It'll ricochet even more violently.
no such thing as a quadruple bottom
one feels that it will only take a 'not as bad as expected' ISM number to break the channel's upper trendline
Fat Larry Summers brilliant plan to rescue the US economy by manipulating the equity markets is going to work as well as the swap he did at Harvard. Trouble is, this is going to be a hell of a lot harder to unwind.
LMFAO...my god. STINKING DESPERATION...
Well
it seems quite obvious
you know why illusions are forming just b4 something really shocking hits the ground
it's always there...the illusions
August started the same way, big gap up in the cash equity market.
1st of the month is always a gap up so Wall St can force the 401k dumb money in at higher prices.
Bone Thugs N Harmony - 1st of the month
Wall St loves welfare carols.
Most months do. It doesnt last. Its a way of making dumb public pension funds who regularly buy in the first 2 days to pay higher than fair.
whata friggin joke
You can't even call it a market
Its a Pig mens Play pen and that is all
I only hope they really will be wallowing in each others shite soon
This is money coming in yesterday to front run the first day of the month mutual fund buying and mutual fund buying today. The news spin is the data was a better than expected increase in likelihood for QE2. Bizarro World. Short it.
Mutual funds buying.....redemptions?
The one guy that has a job sent them his monthly contribution having his $5 levered up 2000 to the 200th exponential
More like direct fed intervention.
People talk about the markets being so corrupt "today" and how it's all going to hell. Come on people really, when have the markets ever been honest and not manipulated i ask you? I remember in 2002 when i stopped trading futures/bonds/options and solely concentrated on forex currencies because i worked out that forex currencies are the "least manipulated" market i could trade in order to make a profit. The markets have always been manipulated by special interest groups throughout history and guess what they will continue to be so long into the future.
..."Come on people really, when have the markets ever been honest and not manipulated i ask you?"
A: Never
My Q: When have they been manipulated this openly and overtly?
My A: Also Never
It's an election year people, nothing is going to make since. The last thing this nation needs is the Republicans back in power. We will all be in bread lines.
The banks that create money out of thin air thanks to the fraction reserve system will be seizing hard assets and will soon own everything. And with the skimpy reserve requirements now in place it will happen much sooner.
We have been sold out America to the fiat paper money thieves.
I feel like I was sold to a Thai massage parlor giving perpetual happy endings to Benny.
Yea, the Republicans...that's the answer.
They'll magically solve a $14T debt.
And here is Goldman explaining why the Chinese PMI number, despite what Doug Kass would like to tweet, actually confirms an ongoing slow down in mainland China.
What the hell does Doug Kass know? This is a man who admits to owning, and doubling down on BAC. Ouch! Good luck with that "Dougie"!
This will only have two outcomes a deflationary collapse like US 1930's or
Zimbabwe/Weimar
we all have to pray its the former that wins
Bennie boy really is the most dangerous man alive
Deflation is great for people with cash
exactly the kind of people who should be rewarded
instead everyone will be punished espially the ones who have saved and not got into debt
what f*cked up world and its only people like Tyler that see and complain
everyone else is content as long as American Idol remains on air
They're content because they have no skin in the game. They're boxed in with not only a glass ceiling, but a floor and side walls. I'm a person who would stand to gain substantially from a situation where little or no debt + cash position reigns supreme. However, I realize that other people (who have attained their money through fraud, shenanigans, and financial chicanery, rather than generic work) stand to profit far more than myself from buying up assets on the cheap.
You say we should be rewarded, but I think your statement needs to be refined to address the wealth gap.
The Eurozone's Flat Jobless Rate Maskes a Chasm Between the “Core” Economies and the “Peripheral” Group
What's so worthless and irrelevant about ADP reports? As long as you keep in mind which portion of the labor market they cover, they won't mislead.
Kass is just part of the Cramer theater these days. They play the same routine over and over: Kass makes two alternate predictions in one article, two months later Cramer trumpets how one of them was "right as rain". Their audiences seem to love it.
1064
ahhhhhhhhhh
nyse advancing vol -95% vs yesterday's close
selling the f*cking spy w/ a stop @ daily close above 107
Are there nicer set-ups for an outside red candle day?
I think my own trading is the best contrain indicator there is
everytime i go long the market tanks and then when i short it goes up
F*ck It i may go long again
Its worth spending a bit to get this bitch to stay down
Maybe the POBC chief joined ' Bennie & the
Sockets' team
for the shorts, hedge. for the longs, bet on black. rinse and repeat.
getting the market up before an "event" seems to fit here.
overmedication
you may be right
this market action looks almost like a seismic precursor to a major earthquake
up and dwon very quickly
something BIG is looming
we are getting towards 9/11 after all
maybe they have planned a nice little remembrance day
its the 9th anniversary, after all
I feel bad for the "dumb money."
social networking website development
Article is very interesting,thanks for your sharing.I will visit this site.welcome to my site!.... cheap site hosting
windows web hosting
windows vps hosting