Good morning. Here’s what you need to know.
Asian markets were mixed in overnight trading. Japan’s Nikkei closed down 0.04% and Korea’s Kospi was off 0.69% while Hong Kong’s Hang Seng was up 0.66%. European markets were all down, and U.S. futures looked mixed.
It’s going to be a busy week for the economy, starting today. The world’s economies began releasing their purchasing managers indices (PMI) last night, giving us a good idea of the temperature of the global economy. The Asian economies were first (anything above 50 is deemed healthy): South Korea’s PMI was up to 50.4 from 50.2 in October; China HSBC, 50.8 from 50.9; Taiwan, 53.4 from 53.0; Vietnam, 50.3 from 51.5. “Our concern as economists is that a new round of geopolitical tension in the region could have ramifications on trade at a time where momentum is already slowing in emerging economies,” wrote the analysts at Société Générale. See our full scorecard here.
Next up was Europe. Italian manufacturing hit a 2-year high, rising from 50.7, to 51.4. Greece hit its own milestone, with output actually expanding. Greece rose from 47.3 in October to 49.2, the country’s highest level in 51 months. France, on the other hand, hit a 5-month low, dropping from 49.1 in October to 48.4 in November. Spain also took a dive, from 50.9 to 48.6. The U.K. continues to be the belle of the European ball, with PMI spiking from 56.4 to 58.5. Later this morning we’ll get data on U.S. PMI.
Then at 10:00 a.m. ET, we’ll see U.S. ISM manufacturing and construction spending data. Economists believe the ISM index dropped to 55.0 in November from 56.4 the month prior. “A tug of war between the reported rebound in the Markit Economics’ national barometer and generally softer regional manufacturing canvasses suggests that the Institute for Supply Management’s (ISM) Purchasing Managers’ Index (PMI) probably dipped modestly to 56.0 in November, essentially matching the average posted over the August-October span,” Societe Generale’s Brian Jones wrote clients. Economists are also looking for a 0.4% climb in construction spending in October, though the data may be off thanks to the government shutdown.
In an interview with German magazine Der Spiegel, Nobel Prize-winning economist Robert Shiller warned of a financial bubble. “I am most worried about the boom in the U.S. stock market. Also because our economy is still weak and vulnerable,” he told the magazine. “I am not yet sounding the alarm. But in many countries, stock exchanges are at a high level and prices have risen sharply in some property markets,” he said. “That could end badly.”
Amazon CEO Jeff Bezos said the company is experimenting with 30-minute drone delivery. In an interview Sunday night with Charlie Rose, Bezos said he expects the drone delivery system — dubbed Prime Air — to be operational within four of five years.
Mass violent protests have broken out in both Thailand and Ukraine. In the former, Prime Minister Minister Yingluck Shinawatra said she would not resign amid anti-government protestors’ attempts to topple her administration. In Kiev, protests turned violent after President Viktor Yanukovych’s refused to sign a trade agreement with the EU, effectively sealing the country’s ties with Russia.
On ESPN “College GameDay,” a student held up a sign with the Bitcoin logo and a QR code, the visual “barcode” associated with his digital wallet. Like any college kid, the student was cheekily imploring his Mom to send money. Little did he know that the Reddit community, the consummate Internet champion of Bitcoin, would enhance the image and make digital donations. He racked up over $24,000-worth of the cryptocurrency.
A J.P Morgan economist has given his “response” to the pope’s widely circulated critique of capitalism. James Glassman doesn’t mention Pope Francis by name, but it’s pretty clear he’s offering the counterpoint to the pontiff. “Poverty is not a modern phenomenon,” he writes. “Second, the developed economies are still recovering from deep recessions and in time will reach their full potential… Those hurt by the recession will be restored as the developed economies continue to recover. And third, despite the cyclical problems of the developed economies, the average global living standard is at a record high—the highest known in the records compiled by economists and still climbing, thanks to the support from the developed economies.”
Finally, today is Cyber Monday, the digital shopping sister to Black Friday. Online sales from desktop computers and mobiles could reach $2 billion. It’s still a fraction of the money generated during Black Friday, albeit with fewer fistfights.
By: Steven Perlberg