Courtesy of John Nyaradi.
European stock markets and U.S. futures fall on China slowdown
China’s manufacturing data slowed according to the HSBC flash purchasing manager’s index.
This was the fifth monthly decline in a row and dropped to 48.1 which is below the 50 level that indicates contraction in economic activity.
There has been a long running debate regarding the slowdown in China and whether it will be a “hard” landing or a “soft” landing but ongoing data suggests that a significant slowdown in China is underway. Exports have fallen, along with domestic demand and today’s reading was down from 49.6 in February.
Analysts are also projecting a recession or at least a slowdown in Europe and global stock markets and U.S. futures markets are down on concern over a global slowdown.
Overnight, European indexes declined with the STOXX down 1.3%, the FTSE 100 declining 0.8% and the DAX dropping 1.3%.
The Euro dollar (NYSEARCA:FXE) declined 0.4% to $1.3157 while the S&P 500 futures (NYSEARCA:SPY) was down 0.52% in overnight action.
On Wednesday, iShares FTSE China 25 Index Fund (NYSEARCA:FX) gained 0.4% while iShares MSCI Hong Kong Index declined -0.67% and the Shanghai Composite gained 0.06%.
Bottom line: China’s economy has been slowing in recent months and today’s report casts further doubt on the strength of the world’s second largest economy. Europe is also on the cusp of recession and so the global recovery faces new headwinds as economic activity slows.
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