For much of the year, the big story was that the US economy was the world’s strongest, refusing to succumb to weakness, even as Europe went into crisis, and China flirted with a hard landing.
Because of this, the US stock market was a star performer.
But for the moment, things are doing a 180...
Europe was stable too. Eurozone PMI hit its highest level in 8 months.
And this time it was the US ISM report that laid a brick, with the headline number going sub-50 (signaling contraction) and various sub-indices doing poorly….
SCORECARD (All Times EST)
- Japan: Markit/JMMA Manufacturing — 46.5, down from 46.9 in October
- China: NBS Official PMI — 50.6, up from 50.2 in October
- South Korea: HSBC Manufacturing PMI — 48.2, up from 47.4 in October
- Netherlands: NEVI Manufacturing PMI — 48.2, down from 48.9 in October
- China: HSBC Manufacturing PMI — 50.5, up from 49.5 in October
- Taiwan: HSBC Manufacturing PMI — 47.4, down from 47.8 in October
- Vietnam: HSBC Manufacturing PMI — 50.5, up from 48.7 in October
- Indonesia: HSBC Manufacturing PMI — 51.5, down from 51.9 in October
- India: HSBC Manufacturing PMI —53.7, up from 52.9 in October
- Russia: HSBC Manufacturing PMI — 52.3, down from 52.9 in October
- Saudi Arabia: SABB HSBC Manufacturing PMI —57.0, down from 59.8 in October
- Ireland: NCB Manufacturing PMI — 52.4, up from 52.1 in October
- 3:00 AM Turkey: HSBC Manufacturing PMI — 52.5 in October
- 3:15 AM Spain: Markit Manufacturing PMI — 45.3, up from 43.5 in October
- 3:45 AM Italy: Markit/ADACI Manufacturing PMI — 45.1, down from 45.3 in October
- 3:50 AM France: Markit Manufacturing PMI — 44.5, up from 43.7 in October
- 3:55 AM Germany: Markit/BME Manufacturing PMI — 46.8, up from 46.0 in October
- 4:00 AM Eurozone Manufacturing PMI — 46.8, up from 45.7 in October
- 4:00 AM Greece: Markit Manufacturing PMI — 41.8, up from 41.0 in October
- 4:30 AM UK: Markit / CIPS Manufacturing PMI — 49.1, up from 47.5 in October
- 5:00 AM Australia: AiG Manufacturing PMI — 45.2 in October
- 7:00 AM Brazil: HSBC Manufacturing PMI — 50.2 in October
- 9:00 AM US: Markit Manufacturing PMI — 51.0 in October
- 9:30 AM Canada: RBC Manufacturing PMI — 51.4 in October
- 10:30 AM Mexico: HSBC Manufacturing PMI — 55.5 in October
BIG MISS: ISM MANUFACTURING FALLS TO 49.5 (Analysts Expected 51.4)!!! Differences Between First Half Of Year And Remaining Half Are Very Dramatic
ISM Mfg prints at lowest in 2012
More on the ISM report: The 49.5 read is a big miss, the 4th contraction in 6 months, and the lowest print since July 2009. It was led by big drops in New Orders and Employment, but also Inventories, which declined 5 points to 45. Customers’ Inventories dove 6.5 points to 42.5, suggesting purchasing managers feel they’ve gotten far too lean.
U.S. manufacturers contracted in November and activity fell to the lowest level since July 2009, as new orders sank and employment plans were scaled back, according to the closely followed ISM index. The Institute for Supply Management index fell to 49.5% from 51.7% in October. Economists surveyed by MarketWatch had expected the index to remain flat at 51.7%. Reading under 50 indicate more manufacturers are shrinking instead of expanding. The index has now fallen in four of the last six months. The ISM’s new-orders gauge sank to 50.3% from 54.2%, although the production index edged up to 53.7% from 52.4%. The employment gauge declined to 48.4% from 52.1%, the lowest level since September 2009. Earlier Monday, a similar U.S. manufacturing survey produced by Markit rose to a six-month high of 52.8 in November.
U.S. Recession 2013 100% Risks Follow On
Courtesy of Doug Short : Professor Piger updated his recession probability model that caused so much attention early November (See “Debunking 100% probability of recession“). As we forecast last month, the probability index undertook a “revision” of epic proportions as displayed below (01-Dec-12 vintage):
This is a classic real-world rendition as to why you cannot make “never before has recession probability reached 20% without a recession ensuing shortly after” type inferences with these Markov model readings, and why the developers of the model use 3 or more readings above 80% before making recession calls. Hopefully last month was the last time we see misinformed bloggers jumping to wild conclusions and scaring everyone witless with baseless inferences without doing their homework.
Our Economy Is In Big Trouble: Business Sales Is Slowing At An Increasing Rate, US Consumer Makes, Spends Less In October, Real Income Falls For Third Month, And Deflation Started in Europe Will Soon To Overtake The US