Second Thoughts About Trade

March 5, 2018

U.S. equities turned higher at mid-day on lessening worries about a trade war.

  • Republicans in Congress do not support President Trump’s desire to impose big tariffs on steel and aluminum.
  • Some investors believe the threat is a political negotiating ploy that will not happen and will not trigger a trade war.

Reported PMI indices today that improved included Singapore’s private purchasing managers index, Hong Kong’s manufacturing PMI, Russia’s composite and services PMIs, the Saudi non-oil PMI, Russia’s services and composite indices, Spain’s services and composite PMIs, the Standard Bank’s private South African PMI, Lebanon’s private PMI, and Britain’s services and composite indices.

PMI’s that were loser in February than January reported today involved the U.S. non-manufacturing survey, Euroland’s services survey, and individual PMIs for Germany, France, Ireland and Italy. Also down last month were the Japanese and Chinese services and composite PMIs, the U.A.E. and Egyptian non-oil PMI surveys, India’s, composite and service-sector PMIs (each of which swung below 50), and  Brazil’s composite and service-sector indices.

Importantly, the U.S. non-manufacturing PMI slipped only 0.4 points to 59.5, whereas Euroland’s service-sector PMI dropped 1.7 points to 57.1.

Retail sales volume in the euro area edged down 0.1% in January after a 1.0% decline in December. Such was 2.3% higher than in January in 2017.

Greek quarterly GDP growth slowed last quarter to merely 0.1% and resulted in a 1.4% 2017-over-2016 pace.

The Sentix gauge of investor sentiment toward the euro area fell sharply in March to 24.0, which is below any of the readings since at least mid-2017.

There haven’t been any huge  net changes since early Friday in the dollar against the yen, euro, sterling or Swiss franc.

Oil has moved back above $62.0 per barrel. A 2.88% yield on the 10-year Treasury note has edged back closer to 2.9%.

Copyright 2018, Larry Greenberg. All rights reserved. No secondary distribution without express permission.



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