The mood of the S&P futures changed at 10pm est last night after China reported the preliminary HSBC mfr’g PMI report which saw a drop to 48.1 from 49.6, a 4 month low and the 5th straight month below 50. Copper also immediately sold off after the release. Furthering the decline in the S&P’s was at 4am after France reported an unexpected drop below 50 in its mfr’g PMI and then 30 minutes later Germany did the same. Overall the Euro zone mfr’g and services index out at 5am fell unexpectedly to 48.7 from 49.3. Also, UK retail sales in Feb were weaker than expected. Spanish bonds are down for a 9th straight day with the 10 yr yield approaching 5.5%, an 8 week high and the IBEX index is down for a 3rd day. In the US, gasoline prices rose for a 13th straight day by another .02 to $3.88 which is .30 higher than the same date last month. On the US stock market, while some believe this is a generational time to buy AFTER a 27% move since early Oct, AFTER a 110% rise over the past 3 yrs and done partly in response to the greatest global monetary easing in the history of the world, we’re about to enter an earnings season where Q1 earnings are expected to fall y/o/y, profit margins have topped out, global growth is slowing, inflation remains sticky and interest rates have bottomed.
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