Holy flirkingschmidt. The PMI manufacturing and non-manufacturing indexes for China in February came in far below estimates and at shocking levels.
The manufacturing PMI was projected to come in at a consensus estimate of 46.0. Instead a “wow” figure of 35.7:
The Non-Manufacturing PMI from the same service was no better, estimated to have a consensus of 53.8 and coming in with a dead frozen fish cold 29.6:
These are needless to say depression level numbers indicating the dire straits that the Chinese economy is in. Mohammed El-Arian said it best tonight on Twitter:
Shock number out of #China. The February #PMI for manufacturing came in at just 35.7(the consensus estimate was 45.0)…an indication of how strongly the economy has been contracting as the #CoronaVirus disruptions accentuate prior fragilities caused in part by the trade tensions— Mohamed A. El-Erian (@elerianm) February 29, 2020
This will ultimately destroy the market open on Sunday night Eastern time and indicates that the coronavirus problem is far worse than our already fragile markets have indicated in the past week.
Prepare for more turmoil and more papering over the severity of this problem in the days ahead.