October Begins: World Economies Show Continued Contraction – Crucial PMI Numbers Coming In WEAK!!! China, Australia, Indonesia, and UK PMI All Came In Worse Than Expected!!! Markets Are Preparing For Spain To Get Downgraded!

It’s global PMI day And Crucial PMI Numbers Coming In WEAK!!!




Markets Are Preparing For Spain To Get Downgraded! 

Markets are bracing for a possible downgrade of Spanish government debt to ‘junk’ status.

Ratings agency Moody’s is due to release its decision after a review of Spain’s credit rating wrapped up on Friday.

Analysts widely believe a decision will be forthcoming and that the outcome is unlikely to be positive.

Spain’s credit rating currently sits one notch above ‘junk’ status.

Any downgrade would have severe consequences for the country, as some investors can’t hold non-investment grade debt.



China’s official manufacturing PMI number came in at 49.8 for September.

Economists expected it to climb to 50.1 from 49.2 in August.

Any reading below 50 signals contraction in the industry.

PMI is an index based on a survey of purchasing managers.  The finding are considered to be a very reliable leading indicator of an economy.

Article Continues Below

Here’s a breakdown of the report courtesy of Fung Group.


china pmi

“We don’t expect a bounce back soon from the slowdowns in these East Asian economies,” said Junko Nishioka


China’s manufacturing contraction persisted last month, Japanese industrial companies grewmore pessimistic and South Korean exports fell, signaling East Asia’s biggest economies have yet to reverse their slowdowns.

A Chinese factory index was at 49.8 for September, the first time that it has been below 50 for two straight months since 2009, a statistics bureau report showed in Beijing today. Japan’s Tankan index of large manufacturers’ confidence fell to minus 3 for the past quarter. South Korean shipments slid for a third month.

In China, measures to support growth may be stepped up after the Communist Party dealt with political issues including laying charges against ousted Politburo member Bo Xilai and setting Nov. 8 for the start of a party congress, Bank of America Corp. said today. Japan’s fiscal response may be complicated by a parliamentary stand-off over financing and an election as early as this year, with Prime Minister Yoshihiko Noda reshuffling his cabinet today to revive support.

“We don’t expect a bounce back soon from the slowdowns in these East Asian economies,” said Junko Nishioka, an economist at RBS Securities Japan Ltd. in Tokyo and a former central bank official.




‘Zombie Economy’ May Give Markets a Scare in October

Traders expect October to give the markets a scare, starting with news on the economy and jobs in the week ahead.

After a surprisingly good performance in the third quarter, the thinking is the stock market is ready to pull back, especially after a few choppy sessions and a new batch of data that should continue to show a slow-moving, ‘zombie like’ economy.

“I think the overarching thing is it’s the new quarter. What’s it mean? Did we experience any window dressing? It doesn’t feel like it to me,” said Art Hogan of Lazard Capital Partners. “To me, there’s more downside risk than upside risk.”

“I’m not sure what the catalyst is going to be, but we’re due,” said Hogan.


MARC FABER: I’m Bearish On Stocks, Gold And Everything Else

Marc Faber is still convinced that there’s a 100 percent chance of a global recession and that stocks are due for a big sell-off.

While Faber favors gold, he thinks that it too is due for a correction after staging a huge rally.

He spoke with Fox Business News on Friday:

It has a huge rally from around – the low was at $1,522 last December and we are now over $1,700 and I think we need a correction here. In fact, I am now bearish about practically all assets near term I think we’re entering a correction time where there will be some disappointments, where stock markets, from the recent times can easily drop 20%.

However, Faber’s bearish stance isn’t so bearish that he has dumped everything.

I’m not 100% in cash, for the simple reason that I could be wrong, but in general I think that people that have a heavy exposure to assets being that equities, or gold, or other commodities. I think they will face some profit taking here.

Here’s the whole interview courtesy of Fox Business News:



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