While yesterday everyone was focusing on the ongoing escalation in Ukraine, or BBQing, the real story was the sudden and quite dramatic collapse, or as we called it, "bloodbath [14]" in global manufacturing as tracked by various PMI indices.
Here, via Bank of America, is the bottom line: as the below table shows, out of the 26 countries that have reported so far, 9 reported improvements in their manufacturing sectors in August, while 15 recorded a weakening, and 2 remained unchanged. A reading above 50 reflects expansion, while below 50 indicates contraction. In this regard, there were 5 countries in negative territory and 21 in positive. In particular, Brazil, Greece, Korea and Turkey moved from contraction to expansion, while Australia and Italy did the reverse. The biggest concern: virtually every core and pierphral Eurozone country of note (from France and Germany to Spain and Italy) saw substantial contraciton. Which, as is well-known in the New Normal, is the stuff new all time S&P500 highs are made of.
[15]
