German, French Industrial Production Disappoints in March
German production, adjusted for seasonal swings, fell 1.3 percent, its second consecutive decline and exceeding a 0.2 percent drop predicted by economist in a Bloomberg survey. In France, output unexpectedly fell 0.3 percent, and Italy saw production stagnate in March after a drop in February. Output dropped 2.4 percent in the Netherlands.
The reports suggest growth in the euro area may have started to lose some momentum toward the end of the quarter, when the economy expanded at its fastest pace in a year. An initial estimate put expansion in the January-March period at 0.6 percent, and a second reading will be published on Friday. (…)
In France, manufacturing fell 0.9 percent, compared to a forecast for a 0.6 percent increase. (…)
Germany’s output was dragged lower by a 3.2 percent drop in construction and 1.2 percent decline in manufacturing. Output of investment goods fell 1.4 percent. (…)
Still, factory orders on Monday signaled that industrial output should pick up in coming months. Orders jumped 1.9 percent in March, more than economists had forecast. (…)
Markit’s PMI survey tells us something about April in Germany:
In response to rising new work, companies scaled up their production in April, marking three years of continuous growth. However, the rate of increase was little-changed from that seen in March and modest overall.
But France is a different story:
Business conditions in the French manufacturing sector deteriorated further in April. Moreover, the rate of worsening accelerated to the sharpest for one year. This was highlighted by the headline Markit France Manufacturing Purchasing Managers’ Index® (PMI®) dropping to 48.0 from 49.6 in March.
China Inflation Rate Steady
The National Bureau of Statistics reported Tuesday that China’s consumer-price index rose 2.3% from a year earlier in April, unchanged for the third consecutive month with higher vegetable and pork prices offset by lower fruit and egg prices. The CPI figure undershot a median 2.4% gain forecast by 15 economists in a survey by The Wall Street Journal.
China’s producer-price index decelerated by a better than expected 3.4% in April, compared with a 4.3% deceleration in March. (…)
Saudi Aramco Likely to Step Up Production Saudi Arabia’s state-owned oil company is likely to increase production to meet rising demand this year, CEO Amin Nasser said, potentially adding a new flood of crude to a global glut.
“We’re seeing a global increase in demand,” said Amin Nasser, the chief executive of Saudi Arabian Oil Co., known as Saudi Aramco, at a press briefing at the company’s headquarters.
“We are meeting that call on us.”
Saudi Arabia, the world’s largest exporter of crude oil, is already pumping at near record levels of about 10.2 million barrels a day. (…)
Saudi Arabia’s output tends to increase in the summer anyway to deal with rising air-conditioner use when temperatures reach scorching levels, but Mr. Nasser said Aramco would pump more to meet demand elsewhere.
Mr. Nasser said Aramco expected demand to grow by about 1.2 million barrels a day across the world this year, in line with other analysts’ estimates. He said Saudi Arabia was seeing demand increase from the U.S. and India in particular. (…)
Say goodbye to OPEC, powerful Putin pal predicts Internal differences are killing OPEC and its ability to influence the markets has all but evaporated, top Russian oil executive Igor Sechin told Reuters in some of his harshest remarks ever about the oil cartel.
Bank of America: ‘Vortex of Negative Headlines’ to Send U.S. Stocks Plummeting
(…) In an appearance on BloombergTV yesterday, Bank of America Merrill Lynch Head of U.S. Equity & Quantitative Strategy Savita Subramanian warned of a “vortex of negative headlines” coming in June that could soon push the S&P 500 to 1,850—back near February lows. Among the factors she cited are the upcoming ‘Brexit’ vote, the June decision from the Federal Reserve, and the U.S. election.
“We’re heading closer and closer to the most polarized election that we’ve seen in our careers. So there’s a lot to worry about,” said Subramanian. “One of the things we’ve noticed is that about six months ahead of November in an election year, the market typically peaks and trends downward.”
She added that the Fed is in a tightening mode during a corporate profits recession, which is not typical. (…)