Weak Global Manufacturing Data Adds To Recession Fears

On Monday, Equity index futures turned a bit negative to start a new week and month, as investors are still digesting last week’s data with the S&P 500® index (SPX) near June highs.

Potential Market Movers this week include economic and earnings calendars that appear a bit lighter compared to last week’s, but investors will find plenty of news to take in.

A still-gloomy European manufacturing picture surfaced before the opening bell as Germany, Spain, Italy, and France all reported recession-level July contraction in manufacturing PMI numbers. Despite Germany’s manufacturing PMI numbers coming higher than expected, the reading stayed at contraction levels. June’s preliminary manufacturing PMI data for Australia, France, Germany, and Japan also showed recession-level contractions too.

After the market open, the US ISM Manufacturing PMI report will be released. Depending on the report, US manufacturing could lead global manufacturing higher or compound the problem.

Adding to Europe’s economic woes, German retail sales came in at -1.6% for June, well below the forecasted gain of 0.2% and the previous month’s increase of 1.2%.

Despite the negative reports, the German DAX was up 0.62% overnight and the Stoxx Europe 600 was up 0.34%. The positive performance may suggest that the market was already expecting the weak economic reports.

In fact, the US Dollar Index slid a little further on the news, trading 0.27% lower ahead of the stock market’s opening bell. The European Central Bank appears to be gearing up its cycle of rate hikes just as the Fed appears to be signaling that it’s trying to wind them down.