The US stock market is finishing October with a negative note, as Wall Street prepares for any Fed signs that they are close to the end of their tightening cycles. All major global manufacturing indicators show that the economic slowdown continues to worsen. The appetite for risk is struggling today as China’s manufacturing data was ugly and surging European inflation basically guarantees a recession. Russia’s suspension of the grain deal also raises fears that the war in Ukraine could lead to further disruptions in wheat shipments.
It began in China and continued in Chicago. The global manufacturing sector is experiencing a contraction. China’s COVID crisis is causing a significant drop in factory activity. Europe is heading towards a recession and the US economy is beginning to feel the effects of Fed tightening and inflation.
China’s October PMIs were very disappointing and it suggests that given the current COVID struggles that November won’t be providing much relief. Official Chinese manufacturing readings fell from 50.1 to 49.5.
Some believe that the Chicago PMI report fell in October which could support calls to see an even bigger drop with ISM manufacturing readings tomorrow ….