This may be a day for only small changes. Dow, NAZ & most indices I follow are showing modest gains. One exception, the Dow Jones REIT index is down 2. More encouraging is the VIX (Volatility Index) is down 4 to 55, indicating markets may be calming down. Even oil is only down a buck, no big deal.
As promised, macro economic news continues dreary. Business at manufacturers in the US plummeted to the lowest level in 26 years in Oct. The manufacturing index fell to 38.9, the lowest reading since Sep 1982 (a reading below 50 signals contraction). This is consistent with warnings that after Sep 15 (when the need for the bank bailout program was in the news), economic activity in US fell off a cliff. This number was dramatically below last Sep with a reading of 43.5 & also below economists' expectations of of 41.5. The report is just another in a string of grim indicators that the US is in a recession.
•Manufacturing in U.S. Contracts at Fastest Pace Since 1982 on Credit Woes
Gloomy news about manufacturing also affects other countries. China, the world's 4th largest economy, said its purchasing managers' index fell to 44.6 in Oct, lowest level since the survey began in 2005 & down sharply from 51.2 in prior month. Again, a number below 50 indicates the economy is contracting. This slowdown was driven by a downturn in export orders (US is a leading customer of the exports) & demand for goods such as steel and machinery.
Nov is a new month, many are hoping will bring better times for the markets. The banking credit crisis is healing. This week, there will be more interest rate cuts around the world. But banks need to lend to customers so they can ramp up production. That scenario is not playing out.
On a personal note, I'm trying out Google AdSense ads, hoping they work out. Hope you enjoy them, but there will be a learning curve for me learning how to paste code. Please be patient, thanx.
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