It’s a heavy economic data day today with the focus on global manufacturing and the results seen so far point to continued weakness. China’s state heavy mfr’g PMI remained below 50 for a 2nd month but barely at 49.8 vs 49.2 in Aug. The HSBC smaller enterprise mfr’g index at 47.9 was about in line with the preliminary read. India’s PMI remained at a 9 month low of 52.8. Taiwan saw further weakness as their PMI fell to 45.6 from 46.1, the lowest since Nov. Japan’s Q3 mfr’g Tankan mfr’g report fell to -3 from -1 and was below estimates of -4. Dating back to last yr’s earthquake, it’s below zero for 5 of the last 6 q’s. Services though remained positive. In Europe, UK PMI fell to 48.4 from 49.6, its 5th month in a row below 50 and the final EC PMI was in line with the preliminary at 46.1. Industrial commodities and oil are trading lower off the above news but European markets are well bid as they digest the Spanish banking news from Friday. The Spanish budget and bank capital needs were no different (however separated from reality) than expected but at least for now provides a base line for further discussions between Rajoy and the EU. From an equity market perspective, earnings will start to dominate making the investing landscape a minefield with more earnings disappointments and guidance sure to come.
