Just as the official Chinese manufacturing PMI's disappointing Thursday print pressured stocks on the last day of February, and sent both the MSCI World Index and the Dow Jones to three consecutive days of declines, the longest such stretch of 2019 yet, overnight's Caixin PMI which unexpectedly posted a sharp rebound in February, rising to 49.9 from 48.3 in January, offered some reassurance to investors concerned about the global growth outlook that the global economic drop may have troughed while "Optimism" for a trade deal returned; Treasuries extended their recent decline and the dollar pushed higher for a third day before easing back.
Bullish sentiment stormed back led by China, where shares outperformed with the Shanghai Composite closing 1.8% higher following confirmation that MSCI Inc. will quadruple the weight of Chinese stocks in its global benchmarks from 5% to 20%, while in contrast to the small decline in NBS manufacturing PMI reported just one day earlier, the Caixin manufacturing PMI bounced back in February from the dip in January.
According to Goldman, the Caixin manufacturing PMI showed "Some early signs of better growth momentum in the manufacturing sector in February. However, the floating holiday and continued weakness shown in other indicators such as NBS manufacturing PMI added uncertainties to the above view, and for the period of January to February on average, growth momentum still likely softened from late last year. We continue to expect more policy easing to support the economy, and Jan-Feb industrial production data to be released in two weeks' time will shed more light on the underlying growth trend early this year."
To be sure, the bad data in Europe continued and Spain's manufacturing sector contracted for the first time for more than five years in February data from Madrid showed while in eastern Europe Czech manufacturing sentiment fell at its fastest rate in six years.
Traders will be relieved to see a strong close to the week after a 16% surge from Christmas through the start of this week, MSCI's gauge of global equities has tread water as investors await progress in U.S.-China trade negotiations.
Mixed messages on trade combined with the collapse of the summit between Trump and North Korean leader Kim Jong Un on denuclearization, and data from China showing slowing factory activity to pressure U.S. stocks as Reuters notes.
Elsewhere, Shanghai Comp was choppy as the third straight month of contraction in China's manufacturing sector capped upside in the index, despite MSCI quadrupling China A-share weightings in global benchmarks to 20%. Goldman Sachs estimates that the MSCI move would lead to a potential USD 70bln net buying in A-shares, skewed towards the healthcare and consumer sectors.
https://www.zerohedge.com/news/2019-03-01/global-stocks-surge-strong-chinese-data-msci-inclusion
Bullish sentiment stormed back led by China, where shares outperformed with the Shanghai Composite closing 1.8% higher following confirmation that MSCI Inc. will quadruple the weight of Chinese stocks in its global benchmarks from 5% to 20%, while in contrast to the small decline in NBS manufacturing PMI reported just one day earlier, the Caixin manufacturing PMI bounced back in February from the dip in January.
According to Goldman, the Caixin manufacturing PMI showed "Some early signs of better growth momentum in the manufacturing sector in February. However, the floating holiday and continued weakness shown in other indicators such as NBS manufacturing PMI added uncertainties to the above view, and for the period of January to February on average, growth momentum still likely softened from late last year. We continue to expect more policy easing to support the economy, and Jan-Feb industrial production data to be released in two weeks' time will shed more light on the underlying growth trend early this year."
To be sure, the bad data in Europe continued and Spain's manufacturing sector contracted for the first time for more than five years in February data from Madrid showed while in eastern Europe Czech manufacturing sentiment fell at its fastest rate in six years.
Traders will be relieved to see a strong close to the week after a 16% surge from Christmas through the start of this week, MSCI's gauge of global equities has tread water as investors await progress in U.S.-China trade negotiations.
Mixed messages on trade combined with the collapse of the summit between Trump and North Korean leader Kim Jong Un on denuclearization, and data from China showing slowing factory activity to pressure U.S. stocks as Reuters notes.
Elsewhere, Shanghai Comp was choppy as the third straight month of contraction in China's manufacturing sector capped upside in the index, despite MSCI quadrupling China A-share weightings in global benchmarks to 20%. Goldman Sachs estimates that the MSCI move would lead to a potential USD 70bln net buying in A-shares, skewed towards the healthcare and consumer sectors.
https://www.zerohedge.com/news/2019-03-01/global-stocks-surge-strong-chinese-data-msci-inclusion
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