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Pre-Market Primer: Asian and European Growth at Multi-Year Lows; Jobless Claims Unexpectedly Flat


A crop of weak economic data takes markets off the central bank sugar high.

MINYANVILLE ORIGINAL US stock futures declined today as Chinese manufacturing and Japanese exports indicated a broad, worsening global slowdown.

Chinese manufacturing was stagnant this month, according to the flash manufacturing PMI survey. The index held at 47.8 from last month. A reading below 50 indicates worsening business conditions. Chinese stocks fell to their lowest level since February 2009 today.

Japan's trade deficit with the rest of the world narrowed to 754.1 billion yen in August from 517.4 billion in July. Exports dropped 5.8% from the year-earlier period, led by exports to the European Union, which fell 22.9% -- the eleventh straight decline. Japan's exports to China slid 9.9%, and the continued tension between those countries this month is not likely to help much.

Both China and Japan are embarking on stimulus programs to spur their domestic economies into action. Japan is taking the monetary route that the US and Europe are leading, while China plans on spending enormous amounts of money to expand and improve infrastructure in the country.

The eurozone's composite PMI fell to 45.9 in September, its lowest level since June 2009. The silver lining in Markit's report is that Germany's downturn is easing.

In the United States, initial claims for unemployment insurance last week unexpectedly stayed flat at 382,000. Economists expected claims to fall to 375,000 and last week's figure was revised up to 385,000.

Futures fell this morning ahead of the bell, indicating that stocks will open lower today. Dow (INDEXDJX:.DJI) futures fell 0.25% to 13,463.00, S&P 500 (NYSEARCA:SPY) futures dropped 030% to 1,448.90, and Nasdaq (INDEXNASDAQ:.IXIC) futures were off 0.21% at 2,847.50.

Bank of America (NYSE:BAC) will be making another 16,000 job cuts by the end of this year. The cuts are part of chief executive officer Brian Moynihan's ongoing Project New BAC, which began over a year ago. The cuts will give the Charlotte-based bank a smaller headcount than its competitors.

Oracle (NASDAQ:ORCL) will report its fiscal first quarter sales after the bell today. Analysts expect that earnings rose to $0.53 per share from $0.48. The business software company is behind in the growing trend toward cloud computing, which is gradually replacing Oracle's more lucrative traditional database business.

Nike (NYSE:NKE) shares rose in pre-market trading as the company announced that it will buy back $8 billion in shares.

Adobe (NASDAQ:ADBE) shares rose in the pre-market despite the company's reduced outlook for the current quarter and disappointing third fiscal quarter earnings. The maker of Photoshop and other software said yesterday that the company is moving towards a subscription model that would bring more stable revenue in the long run.

Japanese auto companies have already lost $250 million in output this week as Chinese protests forced them to shutter the factories for safety, according to IHS Automotive. Some Toyota (NYSE:TM) plants are still languishing. The factories will probably make up for the shortfall through overtime.

General Motors (NYSE:GM) is eyeing Ally Financial's auto-lending operation in Europe and Latin America, Bloomberg reports. Ally is offering its non-US business to help pay for a government bailout. Toronto Dominion (NYSE:TD) and Royal Bank of Canada (NYSE:RY) have also shown interest in Ally's Canadian units.

Twitter: @vincent_trivett
No positions in stocks mentioned.
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