Photo: Dr. Ed’s Blog
President Barack Obama faces lots of issues around the world that pose significant risks to the US economy. The fiscal cliff may actually be the easiest one to deal with if a deal can be struck between the Democrats and Republicans.Making deals to peacefully resolve the conflicts between Israel and Iran, China and Japan, and the already warring factions in Syria could be much more challenging. If any of these conflicts worsens, the global economic expansion potentially could be disrupted. For now, the global economy is growing, though at a slow pace on balance, despite the recession in Europe. Let’s review:
(1) US and China. The latest batch of US economic indicators for October confirms that the US economy continues to grow at a leisurely pace despite fears that growth could stall. We reviewed Friday’s better-than-expected employment data on Monday. Yesterday, we reviewed the PMIs, which are all above 50.
Moving above 50 for the first time since July was China’s M-PMI during October, but just barely to 50.2. China’s NM-PMI was stronger last month, rising to 55.5 from 53.7 the previous month. Elsewhere in the Asia-Pacific region, Indonesia’s real GDP growth held above 6% for an eighth quarter as domestic consumption and rising investment countered an export slump.
(2) Europe. On the other hand, German factory orders fell by 3.3% during September. Foreign orders tumbled by 4.5%, led by a plunge of 9.6% in orders from the euro zone. Domestic bookings dropped by 1.8%. The area’s recession is starting to spread into the strongest economy in the euro zone. That’s confirmed by the latest M-PMIs, with the one for Germany falling 1.4 points to 46.0 (a two-month low). France’s index (43.7) remained around September’s 41-month low of 42.7, and Italy’s M-PMI dropped to a 40-month low of 45.5.
Photo: Dr. Ed’s Blog
Today’s Morning Briefing: Another Storm. (1) Still powerless. (2) Hello again from MiFi. (3) Noah has left the neighbourhood. (4) Storm surge vs. fiscal cliff. (5) Still in power in DC. (6) This too shall pass. (7) Despite disappointments, earnings estimates are holding up. (8) They are falling for Materials, IT, and Industrials. (9) Earnings outlook improving for Financials and Telecom. (10) “Stay Home” rather than “Go Global” for another year? (More for subscribers.)
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