Thursday, October 24, 2013
Mixed global manufacturing data -- positive in China and negative out of Europe – and a flood of Q3 earnings reports provide the backdrop for the stock market today. The Euro-zone PMI numbers missed expectations, spotlighting the tentativeness of the region’s recovery.
But as this morning’s positive guidance from Ford (F - Analyst Report) shows, the region’s outlook has definitely improved. The positive-looking Jobless Claims numbers on the home front may not have much informational value given lingering effects of the shutdown.
China’s preliminary Purchasing Managers Index for October by HSBC ticked up to 50.9 from September’s final 50.2 reading. This comes after last week’s positive GDP report, which showed the country’s economy expanded at a +7.8% pace in Q3 after growing at a +7.5% in Q2.
These data points raise hopes that Chinese growth picture has likely stabilized, though questions still remain as the country’s leadership meets in an important policy plenary session next month. Today’s PMI index showed broad-based improvements in new orders, exports and backlogs, though the employment sub-index weakened a bit.
We should keep in mind, however, that the final September PMI of 50.2 was a downward revision from the preliminary reading for that month. As such, over-interpreting today’s release may be premature.
On this morning’s super-busy earnings calendar, we got solid reports from Ford, 3M (MMM - Analyst Report) and Pulte Group (PHM - Analyst Report), though Dow Chemical (DOW - Analyst Report) came short of expectations. Amazon (AMZN - Analyst Report) and Microsoft (MSFT - Analyst Report) will be reporting after the close. Including this morning’s long line-up of reports, we now have Q3 results from 191 S&P 500 members that combined account for account for 43.7% of the index’s total membership.??????