Are Global Markets Saying Global Economies Are Still In Trouble?
Thursday, November 1, 9:25 a.m. Forecasts of a global recession next year have been quite widespread, and from some quite believable sources. Yet there have been a number of encouraging signs in recent global economic reports, especially in the U.S. where home sales, new housing starts, and home prices have all been rising. The jobs [...]

Thursday, November 1, 9:25 a.m.

Forecasts of a global recession next year have been quite widespread, and from some quite believable sources.

Yet there have been a number of encouraging signs in recent global economic reports, especially in the U.S. where home sales, new housing starts, and home prices have all been rising. The jobs numbers and unemployment rate have been improving significantly. Retail sales are picking up, and the University of Michigan’s Consumer Sentiment Index shows consumer sentiment is at its highest level since 2007. And last week it was reported that the U.S. economy (GDP) grew 2.0% in the 3rd quarter, up from 1.3% in the 2nd quarter.

In Asia, It was reported last night that China’s closely watched HSBC PMI Mfg Index rose to 49.5 in October, up from 47.9 in September. That’s still in contraction mode, under the 50 level that would indicate expansion, but still 49.5 is an 8-month high. And it was reported that China’s official government compiled PMI rose to 50.2.

But yet, global markets are unimpressed. After rallying strongly off the June low as economic reports were worsening, the FT World Stock Index has been in at least a short-term decline of about 5% since mid-September.

On the charts it has broken beneath its 50-day moving average, attempted to rally, but discovered that the m.a. is now potentially overhead resistance on rally attempts.

Since the stock market usually acts now on what it expects economic conditions to be six to none months ahead, are markets disbelieving the recent positive economic reports, believing them to be only temporary?

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To read my weekend newspaper column click here: Is The Market Plunging Over An Earnings Cliff-

Subscribers to Street Smart Report: The new issue of the newsletter was out Tuesday and is in your secure area of the Street Smart Report website.

 Yesterday in the U.S. Market.

A mixed day, with the bounce we expected after being closed for two days. but it struggled to hold onto the gains, the Dow closing down 10 points. Trading volume picked up to 0.85 billion shares traded on the NYSE.

The Dow closed down 10 points or 0.1%. The S&P 500 closed up 0.2%. The NYSE Composite closed up 0.4%. The Nasdaq closed down 0.4%. The Nasdaq 100 closed down 0.7%. The Russell 2000 closed up 0.7%. The DJ Transportation Avg. closed up 0.6%. The DJ Utilities Avg closed up 0.8%.

Gold closed up $9 an ounce at $1,721.

The U.S. dollar etf UUP closed down 0.2%.

The U.S. Treasury bond etf TLT closed up 0.6%.

Yesterday in European Markets.

European markets closed down yesterday. The London FTSE closed down 1.2%. The German DAX closed down 0.3%. France’s CAC closed down 0.9%.

Asian Markets were  mixed last night.

The Asia Dow closed down 0.3% last night.

But among individual markets last night:

China closed up 1.7%. Hong Kong closed up 0.8%. India closed up 0.3%. Japan closed up 0.2%. Singapore closed up 0.3%.

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Markets This Morning:

European markets are up this morning, recovering from their declines yesterday . The London FTSE is up 0.6%. The German DAX is up 0.6%. France’s CAC is up 0.7%.

Oil is up $.31 a barrel at $86.55.

Gold is up $6 an ounce at $1,725.

This Morning in the U.S. Market:

This week is a heavy week for potential market-moving economic reports, including Consumer Confidence, Construction Spending, the ISM Mfg Index, Factory Orders, and culminating on Friday with the Labor Department’s Employment Report for October. To see the full list click here, and look at the left side of the page it takes you to.

Monday’s reports were that consumer spending was up 0.8% in September after rising 0.5% in August. But consumer income rose a slower 0.4%. And the Dallas Fed’s Mfg Index improved to +1.8 in October from –0.9 in September, better than the consensus forecast of an improvement only to a neutral 0.0.

Tuesday’s report was the Case-Shiller Home Price Index, which was up 2.0% year-over-year in August, after officially turning positive year-over-year in June.

Yesterday’s reports were that the Chicago PMI Index improved fractionally to 49.9 in October from 49.7 in September.

This morning’s reports are that the ADP jobs report was that 158,000 new jobs were created in October. And 3rd quarter Productivity was up 1.9%, the same as the 1.9% rise in the 2nd quarter. And there new weekly unemployment claims fell by 9.000 last week to 363,000, and the four-week moving average declined 1,500 to 367,250.

Still to come are the ISM Mfg Index, and Construction Spending, both to be released at 10 a.m.

This morning’s quite positive reports so far have not had much impact on the early morning indicators.

Our Pre-Open Indicators:

Our pre-open indicators are pointing to the Dow being up 35 points in the early going.

To read my weekend newspaper column click here: Is The Market Plunging Over An Earnings Cliff-

Subscribers to Street Smart Report: The new issue of the newsletter was out Tuesday and is in your secure area of the Street Smart Report website.

I’ll be back with the next regular blog post on Saturday morning, as usual later than on the week-days, probably around 11:00 a.m.

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