A closely followed measure Chinese manufacturing industry’s health has signaled its first contraction since mid-2017. The news sent stocks in Asia and Europe tumbling, along with American futures prices. Bloomberg‘s Jana Randow reports on trade tensions and manufacturing around the world, writing:
Growth in the world’s largest economies is set to slow this year. Ongoing trade tensions between the U.S. and China are hurting demand across Asia’s manufacturing hubs and export-oriented European economies including Germany. Political uncertainty is weighing on confidence, while the U.S. government remains shut because of a budget fight over border security.
A gauge for U.S. factories is due at 9:45 a.m. Washington time. Five Federal Reserve indexes of regional manufacturing all slumped in December, the first time they’ve fallen in unison since May 2016. In the U.K., a factory gauge improved, though that was largely due to companies stockpiling for a potentially disruptive Brexit.
“The PMIs are signaling trouble ahead,” said Hak Bin Chua, an economist at Maybank Kim Eng Research Pte in Singapore. “There have been some healthy trade numbers in some countries, but this is probably short-lived.”
Bloomberg’s Global Trade Checkup is softening after an earlier rush to front-load export orders ahead of threatened tariffs. While President Donald Trump has signaled that negotiations with China are making progress, economists remain wary that the talks could stall ahead of a March 1 deadline.
Read more here.
Jeremy Jones, CFA
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