Good morning! Here are the major stories in markets you should know about today.
China Is Slowing. China’s HSBC manufacturing PMI fell to 49.6 in December from 50.0 in November. This was just marginally higher than the flash (preliminary) reading of 49.5. This was the first sub-50 reading since May, and any reading below signals contraction.
German Minister Jorg Asmussen Has Been Meeting With Syriza Figures In Greece. German chancellor Angela Merkel has been preparing for weeks for a new, radical left-wing government in Athens, according to the Italian newspaper La Stampa. Labour minister and former ECB board member Jorg Asmussen has been visiting Athens for talks with the coalition.
And Greece’s Prime Minister Says Greece’s Future In Europe Rests On The Upcoming Election. Greece’s prime minister, Antonis Samaras, warned Tuesday the financially-stricken nation may be forced out of the eurozone if January’s parliamentary election hands hard-left party Syriza power to reverse years of austerity measures.
Saudi Arabia’s King Abdullah Has Been Hospitalized. “Saudi King Abdullah has been admitted to a hospital in the capital Riyadh where he is undergoing medical tests, state media reported on Wednesday, citing a royal court statement,” Reuters reported. He’s 91 years old.
Markets Are Mixed. In Europe, Britain’s FTSE 100 is flat, France’s CAC 40 is up 0.6%, and Spain’s IBEX is down 0.1%. Japan’s Nikkei closed down 1.57%, ending the year 8.91% higher than it began in January 2014. US futures are up a hair with Dow futures up 8 points and S&P futures up 2.4 points.
Initial Jobless Claims Are Coming. It’s a light day for economic data, but US figures on official jobless claims in the week to December 19 are out at 8.30 p.m. ET. Economists are expecting 290,000 initial applications for unemployment benefits.
Chicago Purchasing Managers Index Is Coming. This regional activity index will be released at 9:45 a.m. ET. Economists estimate this activity index fell to 60.0 in December from 60.8 in November. “The Chicago business barometer index has been volatile recently, but has remained over 60 for the past four releases,” Nomura economists noted. “The new orders and order backlog sub-indexes remained elevated in November, providing support for future activity.”
Home Sales Data Is Coming. We’ll get the November pending home sales report at 10:00 a.m. ET. Economists estimate pending sales climbed by 0.5% in November. “MBA applications for purchase rose 4.5% m/m in November, and the NAHB buyer traffic measure rose to 45 (from 41), both indicating a rise in pending home sales on the month,” Barclays economists said.
Regional Fed President Naranya Kocherlakota Says The US Deflation Risk Is Serious. The chance of US inflation falling below 1% in 2015 is at a five-year high, and the risk of deflation is growing more likely, an analysis of market data released by Kocherlakota and the Minneapolis Federal Reserve Bank showed.
Venezuela Is Plunging Even Deeper Into Recession. Venezuela’s economy saw its third consecutive quarter of contraction, with a 2.3% drop in output during the three months to September. The oil-producing nation is also recording dramatic official inflation of close to 5% per month.
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