China missed estimates in its PMIs (Purchasing Managers Index) for both manufacturing and services. Services actually came in below 50 (read contraction).
Japan's industrial output declined 1.5% in July, but that was considered a win. Given that it was coming off of a 6.5% increase in June, and was expected to fall by 2.5%.
Inflation reads in Europe came in hotter than expected, while French consumers spent 2.2% less in July; forecasts called for a barely 0.2% dip.
Germany's unemployment rate, however, fell a notch to 5.5% in July.
The headline that seemed to hit the markets the hardest was the one that reported that ECB (European Central Bank) governor Robert Holzmann is supposedly lobbying for a bit of tightening of monetary policy. Frankly, the notion that the likes of the U.S. and the European central banks are inclined to do anything consequential in terms of turning down their respective spigots (operative word "consequential") is laughable. Suffice to say that their respective inflation pressures are forcing them to pay lip service to, and, sure, at the margin (for the U.S. anyway) to begin cutting back a bit on their monthly bond purchases. The fact that markets get nervous at the mere mention tells you how addicted they are to central bank juice these days!
Asian equities enjoyed a relatively strong session overnight, with all but 4 of the 16 markets we track closing higher.
Europe's leaning red this morning, with 10 of the 19 bourses we follow trading lower as I type.
U.S. stocks are a bit down to start the session: Dow off 93 points (0.26%), SP500 down 0.27%, SP500 Equal Weight down 0.19%, Nasdaq 100 down 0.48%, Nasdaq Comp down 0.36%, Russell 2000 down 0.46%.
The VIX sits at 16.58, up 2.41%.
Oil futures are down 0.91%, gold's up 0.17%, silver's up 0.22%, copper futures are down 0.35% and the ag complex is down 1.24%.
The 10-year treasury bond is up (yield down) and the dollar is down 0.14%.
Led by Viacom/CBS, uranium miners, emerging market equities, Indian equities and Asia Pac equities -- but dragged by ALB (lithium miner), base metals miners, AMD, ag futures and energy stocks -- our core portfolio is down 0.04 to start the day.
The following from Dan Levy's book Maxims for Thinking Analytically describes the thoughtful macro-driven investment process:
"Ultimately, thinking probabilistically starts by correctly viewing the world as a highly uncertain place. With that view in mind, the logical prescription is to assign probabilities to the various events that could occur, and then update those probabilities as new information arrives. These updated probabilities are used to make better decisions."
Have a great day!