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Tuesday, July 24, 2012

Markit Flash Manufacturing PMI US

Down again - this time to 51.8. June's final was 52.5. The expansion in stocks of finished goods reverses the contraction shown in June. That WAS a hopeful sign. Backlogs of work contracted further to a preliminary reading of 48.7 from 49.6. This is the US! You know, the  global "bright spot"?

Eurozone flash PMIs can be found here. They're as depressing as they have been.No need to dwell on it. 

UPS reported disappointing earnings and a lower growth forecast.

Just to round out the beyootiful picture, Spanish 2 year bond yield, 5 year bond yield, 10 year bond yield. Nothing like a five year at 7.5% and a two year at 6.6% to make you yell "confidence"! We feels it oozing from our pores. We're looking for Apricot ECB Money Scrub to remove that oozing feeling.

All the Kool Kids are carefully walking around not saying "Italy", but 2 year, 5 year, 10 year. There is only one question left - does Germany ante up to keep Italy in, or doesn't it? Italy has its boot up Germany's rear. Whichever way things go from here, Germany's gonna be hurtin'.

In other words, all things proceed to their appointed end.  Meanwhile, our politicians are guiding us to a Euro-style fiasco. What a joyous opportunity!

My notes from the UPS call. Not pretty:

Global trade is lagging GDP growth currently. Only 2nd time in last 10 years that this has happened. They think this is temporary.

Volume growth was driven entirely by B2C , B2B was soft

Ground package volume up 3%, with half of this due to 25% increase in lightweight products (ecommerce)

They see US GDP growth at 1% in 2nd half…”we think current 2H econ forecasts are too high”

International revs down 4% include fx impact

Double digit declines in export volume from Asia to both Europe and US (“fell off a cliff”)

Overall export volume was up 1% as growth out of Europe offset decline in Asia

See export customers trading down to less costly options

Non-US domestic volumes down 3.2%. Southern Europe had double digit declines

US outlook see rev up 1-2%, see B2B deteriorating further – weaker US outlook is primary driver behind reduced outlook “see concerning trends in US”

International, see modest uptick y/y, not due to big improvement, but lapping last year’s weak Q3

Smaller customers very concerned with potential fallout from fiscal cliff, and unwilling to invest/expand
Thanks for the info, Brian

The trade trends still seem lower than the consumer trend - not just in the US but in countries like China. I don't see this turning around quickly.
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