Eurozone PMI Reports Signal More Contraction

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Final October Eurozone Manufacturing PMI Reports from Markit Economics indicate widespread declines.

The disappointing Final October Eurozone Manufacturing PMI reports from Markit Economics came as no surprise to European investors on Friday, as the major European stock indices had been holding at or near the breakeven level earth image Eurozone PMI Reports Signal More Contractionduring the early hours of the trading session.  The preliminary “flash” versions of the Eurozone Manufacturing PMI had been released by Markit on October 24, so Friday’s news was not particularly new (NYSEARCA:VGK).  European Stocks Advance Despite Downbeat PMI Data

Markit’s Final October Eurozone Manufacturing PMI dropped to 45.4 in October, from 46.1 in September.  Storm Clouds Over the Eurozone  The final number was a slight uptick from the flash figure of 45.3.  Job losses were recorded in all Eurozone nations except Ireland.

From the report:

The downturn not only deepened, but also widened during the latest survey period.  Only the Irish PMI stayed above the neutral 50.0 mark, as the Dutch PMI edged back into contraction territory.  Rates of contraction accelerated in Germany, Italy, Spain, Austria and Greece.  Although the downturn in France eased slightly, it remained stronger than the euro area average.

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Countries ranked by Manufacturing PMI® (Oct.)

Ireland 52.1 3-month high

Netherlands 48.9 3-month low

Germany 46.0 2-month low

Italy 45.5 2-month low

Austria 44.8 40-month low

France 43.7 2-month high

Spain 43.5 3-month low

Greece 41.0 4-month low

Although American stock market commentators frequently explain advances in the European stock indices as the result of economic developments in the United States, Friday marked one of the rare occasions when such an observation would have been accurate.  A review of the charts of the major European indices reveals that it was not until just after 8:30 EDT– when the United States Bureau of Labor Statistics released its better-than-expected October non-farm payrolls report – when European stocks began to climb.

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