Stocks could rise again today as manufacturing data from global PMI surveys showed weakness in China and improvements in Europe.
Chinese stocks traded up today despite signs of slowing factory growth. The HSBC China manufacturing PMI showed that factory activity slowed to a 9-month low of 48.2. The government's official survey fell to 50.1. Readings under the 50 threshold indicate contraction in the sector. The government surveys more large and state-sponsored enterprises and HSBC's is weighted more heavily toward small and medium manufacturers. Still, the Chinese manufacturing sector is showing very sluggish growth at best in June.
Japan's quarterly Tankan survey of large manufacturers came in at 4 in the second three months of 2013 after falling by eight points in the first quarter. Small manufacturers also improved to -14 from -19. Service companies reported a rise to 8. Capital expenditure also recovered to 2 from -3.9. Japanese stocks rose on the improvement in this key economic reading.
Better-than-expected PMI data from Europe boosted the continent's share prices and might brighten the economic picture today. Manufacturing for the European Union showed a 0.5 point rise from the flash estimate to 48.8. Germany worsened to 48.6 from 49.4 and France gained two points to a 16-month high of 48.4. Spain's factories had the first month since April 2011 when they didn't get worse. Spain PMI hit the neutral 50 mark.
However, eurozone unemployment hit a record high of 12.1% in May, up 0.1 percentage point from April. Inflation rose to 1.6% but still remains historically low.
The US manufacturing reading is expected to show that growth stayed strong at 52.3. The ISM manufacturing PMI is expected to rise to go from contraction to an expansion of 50.4. Construction spending is expected to rise 0.6% in May after gaining 0.4% in April.
Stocks are headed for a fifth straight day of gains. Dow
(INDEXDJX:.DJI) futures were up 0.45% at 14,890 this morning. Futures contracts on the S&P 500
(INDEXSP:.INX) gained 0.42% to 1,606.00 Nasdaq
(INDEXNASDAQ:.IXIC) futures climbed 0.62% to 2,919.25.
(NASDAQ:AAPL) gained more than 1% in the pre-market after the rumor mill about new products kicked into high gear. Apple reportedly filed a patent in Japan for an "iWatch," its apparent foray into the nascent wearable computing space dominated by the still-rare glasses from Google Inc.
(NASDAQ:GOOG). Sony Corporation
(NYSE:SNE) has had a smartwatch on the market for over a year, with limited success. Apple could face downward pressure however, as analysts at Jeffries, Oppenheimer, and and Susquehanna all cut their price targets to $405, $460, and $480, respectively.
Pandora Media Inc.
(NYSE:P) added 4.35% this morning after Morgan Stanley analysts upgraded the shares to overweight.
No positions in stocks mentioned.
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.