The Fed then has to hike rates in order to curb inflation. Higher rates, however, negatively affect growth.
The US is more resilient than emerging markets to a slowdown in China.
Russ Koesterich explains why fears of an imminent US recession may be overblown.
The stocks at the bottom of the iShares MSCI United Kingdom ETF (EWU) were Fresnillo (FRES), followed by Standard Chartered (STAN), and Randgold Resources (RRS).
The Chinese slowdown has led to a decline in the import of many goods and services. Further, the devaluation of the yuan has made imports very expensive for the country.
William Dudley said that an interest rate hike in September is “less compelling.” This statement lifted investors’ spirits, as evident from the market movement on August 26.
The SPDR S&P 500 ETF (SPY) rose by 3.84% on Wednesday, August 26. 487 out of the 502 stocks in SPY posted upward movement.
The final reading for the Nikkei Japan Manufacturing PMI, released by Markit Economics, showed improving operating conditions for businesses in Japan. The index came in at 51.7 in August against July’s 51.2.
The final reading for the Caixin China Manufacturing PMI came in at a post-crisis low of 47.3 in August compared to 47.8 in July. Growth was restricted by a decrease in output, purchases, and new orders.
Business activity dropped to a five-month low in the Netherlands in August. The Manaufacturing PMI reading was 53.9 in August, a dip from July’s 56.0 but quite strong considering the neutral level of 50.0.
Italy’s August Manufacturing PMI slipped to 53.8 level in August, down from July’s four-year-high of 55.3. The reading was well supported by an increase in new orders at manufacturers.
The Eurozone Manufacturing PMI report for August met expectations for Eurozone business activity despite heightening global economic uncertainty. The reading for August was 52.3. It was 52.4 in July.
The Markit Brazil Manufacturing PMI from September 1 indicates that business conditions in Brazil have been deteriorating for more than seven months. The index was 45.8 in August, down from July’s 47.2.
A fast-paced increase in new export orders and new product launches helped Mexico’s manufacturing PMI record 52.4 in August. Manufacturing growth in Mexico has been expanding consistently since October 2013.
While the dollar’s strength is weakening US exports, it could strengthen Canada’s exports. The August RBC Canadian Manufacturing PMI survey that came out on September 1 proved this advantage.
The final reading for August’s US Manufacturing PMI indicated easing in US business conditions, making investors betting on US industrial sector growth wary of their holdings.
On September 1, Markit Economics released its Global Manufacturing PMI report for August. The composite index fell to 50.7 in August from 51.0 in July.
The Markit Economics PMI Report serves as a business activity scorecard for an economy. It provides insight into the private-sector economy by tracking variables across key sectors.
While higher volatility is here for the foreseeable future, the selloff has created a number of potential opportunities for investors with longer-term holding periods.
While I believe slow global growth will continue and remain below trend, the evidence suggests that the global economy is not on the cusp of another recession.