While the eastern U.S. and even Germany look to have (finally) turned a corner on manufacturing, China's manufacturing PMI remains firmly on the line between growth and contraction. If a strong wind wouldn't be enough to blow them one way or the other, the coronavirus—yesterday dubbed a "global health emergency" by the WHO—just might be. Commodities' health is certainly suffering under the weight of the virus, and even "The Doctor" isn't immune; copper just posted its longest stretch of declines on record. Shipping prices, airline revenues, and still-fledgling EM export growth are among the other primary concerns. Let's hope this market anxiety, and subsequent market reaction, is less contagious than the virus itself. One fear we can address today: while year-over-year U.S. GDP growth is down, we're far from revisiting the the devastating losses of the '07-'09 era. Finally, despite ongoing political and economic struggles, the Eurozone unemployment rate has maintained a downward trend for roughly six years now and just hit its lowest level since the financial crisis—could a stronger workforce spark some growth for the region?
1. China's manufacturing sector is at the line between growth and contraction... Will the coronavirus tip this negative in Q1?
Source: WSJ Daily Shot, from 1/31/20
2. "Dr. Copper" is getting pummeled, down 11 days in a row. Again, reaction or over-reaction?
Source: WSJ Daily Shot, from 1/30/20
3. The collapse of copper, iron ore and other raw materials is putting pressure on shipping prices. Is this indicative of future economic activity? The virus will not help...
Source: WSJ Daily Shot, from 1/31/20
4. There are certainly going to be some real effects including cancelled flights and lost airline revenue.
Source: WSJ Daily Shot, from 1/30/20
5. The worry is that the coronavirus will derail the "green shoots" of growth in EM and elsewhere...
Source: WSJ Daily Shot, from 1/30/20
6. After the New Years holiday, Taiwan gapped lower. A classic, emotional human reaction?
Source: WSJ Daily Shot, from 1/30/20
7. It was the same story in Hong Kong...
Source: WSJ Daily Shot, from 1/30/20
8. Emotional buying is also happening...
Source: WSJ Daily Shot, from 1/30/20
9. It is scary, but facts are beginning to emerge...
Source: Statista, as of 1/23/20
10. And here is one of the effect of the trade wars:
Source: Bloomberg, from 1/30/20
11. Sticking with facts, here is the U.S. GDP growth for the last 12 years:
Source: WSJ Daily Shot, from 1/31/20
12. How big is big?
Source: WSJ Daily Shot, from 1/30/20
13. The European economy has been struggling yet there are signs of life:
Source: WSJ Daily Shot, from 1/31/20
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