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Pre-Market Primer: PMI Shows Manufacturing Slump Abating


Less bad is not the same as better, but we'll take that for now.

MINYANVILLE ORIGINAL Markets are set to rally today after global PMI reports came in better than expected, but concerns that the global economy is continuing to shrink remain.

Several purchasing managers' indexes came out this morning and over the weekend, and many of them are matching or exceeding economists' expectations. While there isn't much news of outright expansion, many of the most important economies are stabilizing. Overall, manufacturing is in a deep slump, but at least contractions are slowing down. Here are a few highlights. A number above 50 indicates an improvement in business conditions in the sector over the month, and below 50 signals a contraction.
  • China: The second-largest economy's manufacturing sector is still contracting, but less so than before. The official manufacturing PMI rose to 49.8 from 49.2 in August. The Markit estimate rose to 48.0 from 47.7. This is the seventh straight quarter of contraction for Chinese manufacturing.
  • Germany: The contraction in German manufacturing narrowed to a six-month high of 47.4 from 44.7 in August, beating economists' estimates by 0.1 point.
  • Eurozone: The 17-member currency union's manufacturing index gained 1 point to 46.1 in September, beating the earlier estimates by 0.1 point.
  • Spain: Still lagging on the eurozone, Spain's manufacturing inched up 0.6 points to 44.0
  • France: Manufacturing slumped by 3 points to 42.7, the country's worst month in 41 months.
  • Japan: The Bank of Japan's Tankan survey for the third quarter came in slightly better than expected. Capital expenditures rose by 1.8 points to 5.8. Large manufacturers are doing somewhat better than small manufacturers, but both groups are in decline.
  • United Kingdom: Manufacturing in Britain sank to 48.4 from 49.6 in August.
  • United States: At 9:00 a.m. EST, economists expect US manufacturing to stay steady at 51.5, a modest expansion. The Institute for Supply Management's own survey will come out an hour later. This indicator will probably signal a slight contraction of 49.7, up from 49.6.

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