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Trade War Subdues Manufacturing PMIs around the World


May. 23 2019, Published 3:28 p.m. ET

Manufacturing PMI

Today, IHS Markit published its purchasing managers’ indexes or PMIs for May countries around the world. Australia saw the composite PMI rise to 52.2 in May from 50 in April. Japan’s manufacturing PMI fell below 50 in May. While Germany’s composite PMI came in higher, its manufacturing PMI dropped to a dismal 44.3. The Eurozone manufacturing PMI remained under pressure while French PMI data outperformed market expectations. A reading above 50 indicates expansion while a reading below 50 means contraction.

Across the board, improvements in the composite PMI were largely driven by the service sector since manufacturing continued to struggle with the ongoing trade war between the United States and China.

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Performance of Markets and ETFs

Australia’s S&P/ASX200 fell 0.29% today. The iShares MSCI Australia ETF (EWA) was down 0.77% around 2:00 PM ET.

Meanwhile, Japan’s Nikkei 225 fell 0.62%, and the iShares MSCI Japan ETF (EWJ) was down 0.8%.

In Germany, the DAX performance Index lost 1.78% today. The iShares MSCI Germany ETF (EWG) was 1.4%.

Despite positive news on the PMI side, France’s CAC 40 lost 1.81% today. The iShares MSCI France ETF (EWQ) was down 1.42%.

Trade concerns weigh heavily

Amid the ongoing trade war between the United States and China, the performance of most global markets and international ETFs has been driven less by local factors and more by market sentiment about a trade deal. Manufacturing around the world seems to be subdued because of the trade war.


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