No big mergers to speak of and more necrophilia on the Greek economic corpse overnight – it’s looking like a tough Monday ahead for stocks. Dow futures are off more than 100 as of this 7 am posting.
Of particular concern to the big commodity exporters and nations like Australia and Brazil is the Chinese PMI number, it shows a definitive cool-off. I’ve been talking about the need to exit commodity trades for weeks now. The tightening of the BRICs has been my primary point here as I’ve battled copper bulls and silver shills all over television.
Here’s what’s got everyone spooked this morning, from MarketBeat:
And here in China, this morning HSBC’s Purchasing Managers Index (PMI) for China came in at 51.1 in May, a 10-month low. It’s still above 50, which means indicating growth, just slower—and a deceleration in growth could be good news, a signal that the bigger problem of inflation is finally coming under control. But markets inside China begged to differ. The Shanghai Composite was down nearly 3% to 2774. Though not a recent low, it’s worth noting that’s where it was in February 2007, before China’s stock bubble popped, and well below the post-bubble high of 3412 hit in July 2009.
We’ll see how she shakes out today but commodity plays simply aren’t on my agenda until further notice.