For much of the year, the big story was that the U.S. economy was the world's strongest, refusing to succumb to weakness, even as Europe went into crisis, and China flirted with a hard landing.
Because of this, the U.S. stock market was a star performer.
But for the moment, things are doing a 180...
Europe was stable too. Eurozone PMI hit its highest level in 8 months.
And this time it was the U.S. ISM report that laid a brick, with the headline number going sub-50 (signaling contraction) and various sub-indices doing poorly.
Whereas the rest of the world is now on an up-tick in momentum, it appears that the U.S. (perhaps due to a combination of Cliff worries and Sandy) is seeing a rough patch.
Earlier today, we posted a couple of sentences from SocGen analyst Kit Juckes. The gist was: The China hard landing risk was coming off the table, the Euro crisis was fading, and now the last risk was the U.S. and the cliff.
Good Morning. An optimist will tell me that at 50.6 China's manufacturing PMI is at its highest level since April, a pessimist will point out that it's barely above 50. But the 'tail risk' of an imminent hard landing for the Chinese economy is fading, just as the conclusion of the latest Greek drama means that risk of a return to full-blown Euro Zone crisis is fading. So, two of three major risks are reduced, leaving only the dreaded 'fiscal cliff' to worry about.
This is the new global economic meme.
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