(As of 7:25 am PST)
Global equities are taking a tumble on disappointing PMI
data out of China and the US. China’s
preliminary “flash” reading of manufacturing PMI fell to a 6 month low in
January surprising investors and muddying the waters of global growth outlook
for 2014. The index, which measures the
activity in the manufacturing sector fell below 50, from 50.5 to 49.6
indicating activity actually contracted in January. The weak report immediately sent waves of
selling throughout global markets. Asian
indexes finished down and European markets are all in the red. US indexes are also lower by nearly 1% on the
China news. A “flash” reading of US
manufacturing didn’t help matters. The
US markit flash PMI fell to a 3 month low, still recording growth but at a
slower pace. Other data was not enough
to pull stocks back from their steep declines.
US jobless claims came in flat last week, while a report on leading
economic indicators rose slightly. A
report on housing showed US existing home sales rose 1% in December rounding
off 2013 as the highest total sales year in 7 years. Earnings continue to trickle in with
McDonalds reporting flat results while Southwest Airlines reported a bottom
line beat. Rates have fallen sharply as
treasuries soared in a flight to safety.
Gold also is rallying on the global equity decline. It looks like the China news will take the
headlines today as 2014 continues to struggle to get out of the red.
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