Investors who have holdings in China received encouraging news this morning. The China HSBC Flash Purchasing Managers Index, which measures small- and medium-sized business conditions, reflected a slow, but steady economic strengthening. The index scored a three-month high of 49.1 (where a rating of 50 indicates economic expansion and anything below means contraction). While the score is still technically in “contraction” territory, at least it’s not another gut punch for investors.
Bernanke’s Bond-Buying Blitz to Continue (Reuters)
Despite growing indications of a stronger U.S. economy, Fed Chairman Ben Bernanke is expected to announce today the continuation of the $40 billion dollar a month bond buying spree, along with its ZIRP (zero interest rate policy) — at least through December. When the billion-dollar bond blitz was initiated, it was set up to continue until the unemployment rate in the United States showed a significant decrease. With no appreciable improvement in the unemployment rate, the Fed is unlikely to change its policy anytime soon.
Investors who own European equities have yet more sobering news to swallow today about the region’s spiraling debt crisis. The latest debt figures show the European Union’s current government debt now is 90% of the 17-nation group’s combined gross domestic product (GDP) — the highest percentage ever recorded in the bloc’s 13-year history. Even worse, according to Howard Archer, chief European economist at business analysis goliath IHS Global Insight, “… the eurozone downturn is, if anything, deepening rather than easing.”
Stocks Tumble, Oil Slides to Three-Month Low on Economy (Bloomberg)
Global stocks slumped the most since July and commodities erased this year’s gains as companies from DuPont Co. and 3M Co. to Alfa Laval AB reported earnings that spurred concern the economy is weakening. Oil slumped to a three-month low and Treasuries rose. “The earnings season has not gone as well as ma
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