Just over a week into a market poised on growth/recovery over QE, but still grappling over the issue as seen by the conviction-less and directionless market moves this week, we’ve stepped on a ‘flash’ mine. As noted, …”the lack of notable eco’/ corporate data until April (maybe some from flash PMI’s late this week) to give market any visibility or direction”.
Overnight, China manufacturing index compiled by HSBC declined to 48.4 from 49.6. At the start of March, we discussed the slumping emerging markets falling 3-4% in a few days. This carried on mid -month…” This week kicked off with Global growth concerns overnight following China’s lacklustre trade numbers (decelerating Jan/Feb combined). Is it really any surprise at this point that the European crisis put a dent in demand for China goods?.”. Since, we’ve had lots of noise about 7.5% GDP and BHP news yesterday. Is it really a shocker at this point?. It's (flash PMI) consistent with all the noise this month. Maybe the Shang down a tad will be a better indicator than the ES before US markets open.
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Update; European PMI’s have come in weaker as well this morning with core countries (Germany/France) worse than peripherals. The European market reaction is worse than in Asian markets, but this likely stems from Italian/ Spanish yields inching up yesterday and this morning.
All in, if risk off mentality is picked up once again, is it really all that bad as QE’s chatter will be the market back-up plan. Also, more oppy ’if anything for dip buyers to pad books into Q end and let’s not forget earnings around the corner and markets rarely correct prior to. In this view, just a reason to consolidate March gains some more. Don’t think the ‘mine’ explodes….needs more mines to be triggered for any real damage.