There is no denying a global slow-down now. China’s PMI slowed to 38 today. This was the lowest level since 2005. In my opinion, this is just another alarming datapoint. China has been the epicenter of the global growth story and this is just one more sign that China is slowing down substantially. Don’t expect to see any bounce in corporate earnings for at least 2 quarters. I think the greatest risks still lie abroad where central banks are still holding rates stubbornly high and the recession appears to be picking up speed at a scary rate.
On the homefront, you probably heard that retail sales were fairly strong today. That might be true, but from all of the evidence I see, the retailers simply sold more at lower prices. Margins were crushed and the buying appeared to slow as the weekend progressed. The beat goes on….
Mr. Roche is the Founder and Chief Investment Officer of Discipline Funds.Discipline Funds is a low fee financial advisory firm with a focus on helping people be more disciplined with their finances.
He is also the author of Pragmatic Capitalism: What Every Investor Needs to Understand About Money and Finance, Understanding the Modern Monetary System and Understanding Modern Portfolio Construction.