Key News
Asian equities ended a poor month with a thud on very high volumes driven by today’s MSCI index rebalance.
China’s May PMIs missed expectations as Manufacturing was 48.8 versus expectations of 49.5 and April’s 49.2 and Non-manufacturing was 54.5 versus expectations of 55.2 and April’s 56.4. PMIs are a diffusion index with readings above 50 indicating growth/below 50 indicating decline on a month-over-month basis. Manufacturing’s poor read is not a good sign for the global economy since much of China’s manufacturing is export driven. Non-manufacturing’s pace of growth has slowed but is still growing. It is interesting that in both PMIs, business expectations are high with Manufacturing’s 54.1 and Non-manufacturing’s 60.4. The release confirmed investors’ concern that China’s economic rebound is incremental against the backdrop of policymakers’ lack of definitive stimulus. “Where’s the beef?” was a key line from a 1980s Wendy’s commercial. Sure, policymakers talk a good game though haven’t delivered on stimulus.
Support authors and subscribe to content
This is premium stuff. Subscribe to read the entire article.