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Al Etihad
23-05-2025
- Business
- Al Etihad
US, Eurozone pull in opposite directions: S&P flash PMI data
23 May 2025 12:40 A. SREENIVASA REDDY (ABU DHABI)The latest flash PMI (Purchasing Managers' Index) data from S&P Global suggests a partial economic rebound in the United States in May 2025, as businesses respond to easing trade tensions. However, the data also reveals intensifying cost pressures, which may cloud the path to recovery. The Eurozone, meanwhile, moved in the opposite direction, with activity slipping back into contraction despite positive trade PMI surveys—early snapshots of economic trends based on responses from a broad sample of businesses—are closely watched for their predictive power on GDP and inflation. For May, the US Flash Composite Output Index rose to 52.1 from 50.6 in April, indicating modest growth. Both the manufacturing and services sectors improved, with the Manufacturing PMI climbing to 52.3—its highest level since June 2022—while the Services Business Activity Index rose to to Chris Williamson, Chief Business Economist at S&P Global Market Intelligence: 'Business confidence has improved in May from the worrying slump seen in April, thanks largely to the pause on higher rate tariffs.' The US had paused new tariffs in April for 90 days, which appears to have provided businesses temporary orders surged, especially in manufacturing, where demand grew at its fastest pace in 15 months. However, export orders for both goods and services continued to decline, with service exports seeing their sharpest drop since the early days of the COVID-19 pandemic. Inventory stockpiling hit record levels, as firms rushed to protect themselves from future tariff-related pressures also surged. May recorded the steepest rise in goods and services prices since August 2022, as tariffs drove up input costs. Manufacturing input prices spiked at their fastest rate since August 2022, and service costs rose at their sharpest since June 2023. 'Prices charged for both goods and services have spiked higher,' Williamson added, warning that 'consumer price inflation [may be] moving sharply higher.'Employment, by contrast, softened. Both manufacturing and services saw job cuts, reflecting uncertainty about future demand and rising costs. This divergence—stronger activity alongside weaker employment—signals caution among to S&P Global's latest macroeconomic analysis, the flash PMI numbers may slightly overstate optimism. The revised estimate of US GDP for Q1 showed a 0.3% annualised contraction, and although May PMI signals some recovery, overall growth remains subdued. Analysts now estimate second-quarter GDP growth at just 1%—well below trend.'While there is a rebound from April's lows, the economy is still operating below capacity,' the S&P Global Intelligence team wrote. Concerns about prolonged inflation may keep the US Federal Reserve from cutting interest rates until December, despite earlier market hopes of a mid-year picture in the Eurozone was less encouraging. The HCOB Flash Eurozone Composite PMI Output Index fell to 49.5 in May from 50.4 in April—marking a six-month low and the first contraction in output in five months. The services sector drove the decline, with activity dropping at its fastest rate in over a output was stable, but overall demand remained on the figures, Dr. Cyrus de la Rubia, Chief Economist at Hamburg Commercial Bank, said: 'The eurozone economy just cannot seem to find its footing. Do not blame US tariffs for this one.' He suggested that any benefit from pre-tariff purchasing was limited to manufacturing, while services continued to suffer from sluggish domestic among eurozone businesses slipped to a 19-month low, driven by weakening sentiment in the services sector. While manufacturing optimism ticked up, it was not enough to offset broader contrast between the US and Eurozone highlights an uneven global recovery. While the US showed signs of a short-term rebound, it came at the cost of higher prices and with little improvement in exports. In Europe, subdued domestic demand and softening confidence suggest that structural issues—not just trade frictions—may be to blame for weak the clock ticks toward the July expiry of the US's tariff pause, businesses globally remain wary. The flash PMI reports offer a mixed message: while there is a glimmer of recovery in the US, it is fragile and inflation-laced. Europe, meanwhile, appears stuck, struggling to convert trade opportunities into broader key data releases expected in the coming week—including updated US GDP, core PCE inflation, and the FOMC meeting minutes—markets will be watching closely for signs of how central banks intend to respond to this complex landscape. For now, the PMI signals serve as both a relief and a warning.S&P Global releases its Flash Purchasing Managers' Index (PMI) data to provide early, timely insights into economic conditions across the manufacturing and service sectors. These flash estimates are based on approximately 85% of total monthly survey responses and are published ahead of the final PMI data, offering an advance indication of the economic trends. Flash PMI data is published for selected major economies where early, high-quality data collection is feasible and economically significant.
Yahoo
01-05-2025
- Business
- Yahoo
Stock market retreat in Trump's first 100 days is among worst starts for a president in almost a century
The stock market under Trump has seen one of its worst performances on record in the first 100 days of a U.S. presidency. It's the worst start to a year since Gerald Ford took over for Richard Nixon 50 years ago, and the fifth-worst performance in the equity markets over nearly a century—a time period that includes the Great Depression, major wars, and the stagflationary 1970s. President Donald Trump's first 100 days in the White House have been historically bad for the stock market. From January 20 to late April, the S&P 500 has dropped almost 8%. That's the worst start to a presidential term since Gerald Ford took the reins of the executive branch after Richard Nixon resigned in 1974. And it's the fifth-worst start since 1928, the earliest date for which S&P Global Market Intelligence has data. (While the S&P 500 in its current incarnation has only existed since 1957, S&P Global Intelligence has comparable data going back to 1928 from previous stock indices that Standard & Poor has developed.) The stock market's lackluster performance under Trump only ranks ahead of the starts of Franklin D. Roosevelt's terms in 1933 and 1937, during the depths of the Great Depression. It also outstrips both Ford and the start of Nixon's second term in 1973, when the U.S. confronted another economic crisis in the form of stagflation. View this interactive chart on Add to that the dollar's stumble and a selloff in the traditional safe-haven investment of Treasury notes, and the first 100 days in the markets have been uniquely unsettling for investors. 'The U.S. stock market and the dollar have fared worse over the last hundred days than they fared during the first hundred days of all other presidential terms since 1980,' John Higgins, chief markets economist at Capital Economics, wrote Monday in a research note titled, 'Surely the next 100 days won't be as turbulent as the last?' Meanwhile, in the first 100 days of Joe Biden's turn in the Oval Office, as global markets rebounded from the damage inflicted by COVID-19, the S&P 500 jumped more than 9%. That ranks as the third-best start for a commander-in-chief since 1928. View this interactive chart on The struggling stock market comes as Trump's tariff plans have sown economic chaos over the past month. In early April, the president called for a baseline 10% tariff on all imported goods and instituted additional 'reciprocal tariffs' on almost 60 countries and territories as well as the European Union. He also prompted a tit-for-tat tariff battle with China and raised taxes on imports from the People's Republic to 145%. 'The USA lost Billions of Dollars A DAY in International Trade under Sleepy Joe Biden. I have now stemmed that tide, and will be making a fortune, very soon,' Trump posted Monday on Truth Social, his own social media app. The U.S. stock markets did not respond well to Trump's stemming of the 'tide.' After 'Liberation Day,' when the president first unveiled his suite of historically severe tariffs on April 2, the S&P 500 tanked 10% in a two-day span. 'Never before has an hour of presidential rhetoric cost so many people so much,' former Treasury Secretary Larry Summers wrote in a post on X, shortly after Trump displayed a cardboard chart outlining increased taxes on foreign imports. View this interactive chart on The President also notably gutted the federal government with the help of Tesla CEO Elon Musk, the de facto head of the Department of Government Efficiency (DOGE), a new organization designed to eliminate 'waste, fraud, and abuse." Analysts have worried about how cuts in federal spending may affect private contractors. 'It's a massive source of revenue for many different types of firms, not just government firms, but also private firms,' Abigail Blanco, an associate professor of economics at the University of Tampa, previously told Fortune. While the president's policymaking bears a large share of the blame for the market turbulence, it's not the only cause for the downfall. Stocks were trading at historically high values at the end of Joe Biden's presidency, leading some economists to worry that the market was overvalued or over-concentrated in a handful of tech companies. And the AI hype driving much of the market exuberance took a dive when China's DeepSeek released a large language model earlier this spring that matched that of OpenAI, wiping trillions from the market cap of U.S.-based firms. This story was originally featured on Sign in to access your portfolio
Reuters
03-04-2025
- Business
- Reuters
Japan services sector loses steam in March as confidence eases, PMI shows
TOKYO, April 3 (Reuters) - Japan's service industry stagnated in March while broader private sector activity contracted at the fastest pace in more than two years, a business survey showed on Wednesday. The service sector's slowdown is of particular concern to the world's fourth-largest economy, which counts on it to anchor growth and offset some of the drag from struggling manufacturing. here. The au Jibun Bank Japan Services Business Activity Index fell to the neutral level of 50.0 in March from a joint-six month high of 53.7 in February, better than a flash reading of 49.5, according to index publisher S&P Global Intelligence. The 50.0 threshold separates expansion from contraction. "After a solid performance in the opening two months of the year, business activity across Japan's service sector stagnated in March as firms commented that market conditions had softened," said Annabel Fiddes, economics associate director at S&P Global Market Intelligence. New order growth slowed for the second straight month to its weakest since last November, according to the survey. New export business continued expanding thanks to solid demand from mainland China and Taiwan, even though the pace eased from last month. Business expectations for the year ahead were solid, but optimism softened to the lowest since January 2021, weighed by concerns about labour shortages, an aging population and global trade uncertainties, Fiddes said. Japanese companies are worried President Donald Trump's blitz of tariffs against trading partners would trigger a broader global downturn. Meanwhile, input price inflation climbed at the fastest pace in 19 months with respondents citing higher labour, raw material and fuel costs as well as exchange rates, the survey showed. Output prices eased to a five-month low. The composite PMI, which combines manufacturing and service activity, fell to 48.9 in March from 52.0 in February, the first contraction since October.
