October 2011 Manufacturing ISM misses estimates

ISM’s October 2011 Manufacturing report on Business came in at 50.8, a level just above contraction. Last month was

The Greek Tragedy Resurfaces

Greece’s decision to hold a referendum weighing on sentiment; global PMIs most softer thus far. EUR/USD has retracted half of its Oct. move in two days; Greek referendum increases disorderly default risk. US ISM manufacturing key report of North American session; Asian trade numbers focus of EMs

China PMI drops to lowest in 32 months

50.4 is the lowest number since early 2009, during the depths of the recession. So this number, shades above contraction, is a big deal. In fact, the sub-index for new (export) orders index is contracting, meaning slowing economic growth in the developed economies is now impacting China as well

Chicago PMI at 58.4 tells a mixed message

In terms of business activity, the Chicago ISM highlighted the fact that order backlogs recovered from two months of contraction and that employment was the highest in six months, even while new orders erased half of September’s gain.

As any number above 50 shows expansion, this is generally good report. But the message is mixed because of the continued fall in the three-month moving average

Markit Flash German PMI Shows Modest Rise; French PMI Contracts Sharply

Key points: German Flash Composite Index at 2-month high; Flash Services Index at 3-month high; French Flash Composite Index at 29-month low; Flash Services Index at 27-month low

European PMI surprises to the downside; Policy will dominate week

Euro zone summit ends with no line drawn in the sand; European PMI surprises to the downside. Markets look for euro zone to present comprehensive three-pong approach to finalize crisis this week. US Q3 GDP expected at 2.5%’; Private sector Chinese Flash PMI reassures our soft-landing view

Input Costs of the iPhone

Great graphic constructed by Mobile Phone Tracker coming to us via Nicholas Jackson of The Atlantic. We were surprised that only $7.00 goes to Foxconn to manufacture each unit. Here are some of Jackson’s favorite “facts and figures” of the iPhone’s input costs

Alcoa earnings call points to weakness in China and Europe

Our macro takeaway from the call is that Europe is rolling over. No normal September bounce from the seasonally slow August. The company also notes what they see as a temporary slowdown in China. Alcoa missed and the stock got hammered in AH trading

Macro Notes from the GM Sep Sales Call

We forgot to post this yesterday. The macro issues raised by GM in their September sales conference call. All are direct quotes from GM management

US manufacturing sector expands at slightly faster pace in September

All of the major sub-indices from new orders to production to employment recorded an acceleration in growth. This is a good report in the face of weakening macro fundamentals globally. However, the US manufacturing sector is very close to contraction even so and this one month increase in data cannot be seen as portending a vigorous revival in growth

US Durable Goods Orders: Another Point for a Good Q3 GDP

Today’s durable goods orders data lends credence to our projection of fairly robust Q3 US GDP after the dismal 0.8% expansion in H1. The durable goods report is the third important piece of data that should encourage economists to look for something close to what is regarded as trend growth in the US (2.5%-3.0%). The sharp rise in July personal consumption expenditures and the smaller real trade deficit were the other two piece

What can we learn from the policies that spurred the Industrial Revolution?

Some of the dominant policy issues of today – immigration, energy, the emergence of China – have their analogues in the great Industrial Revolution. The key government policies that laid the foundation for the Industrial Revolution in England include supporting the immigration of skilled workers, allowing for private ownership of farm land, weakening the unions of the day (the guilds), and addressing the energy crisis (in charcoal). And contrary policies in Italy and Spain – countries that were far wealthier and advanced than was per-Industrial Revolution England – derailed a similar revolution from occurring in continental Europe.
England would not have been anyone’s first bet as the cradle of the Industrial Revolution