Nothing can keep the BTFD spirit at bay in Europe this Thanksgiving morning.
Having started the session on the back-foot after the biggest Chinese stock market tumble in 17 months (the SHCOMP dropped -2.3%, most since June 2016) amid tighter liquidity conditions as a result of today’s Thanksgiving holiday in the US and attempts by regulators to rein in asset management firms and the micro-loan market, the negative sentiment was short-lived however, a slew of blockbuster November Eurozone PMIs, among which the highest output print in 79 months, with the highest employment number in 17 years, helped revive sentiment in Europe – and brought the Eurostoxx back to green on the session. Among the notable composite PMI prints:
Markit noted this was a multi-year highs seen for all main indicators of output, demand, employment and inflation.
#Eurozone output #PMI hits 79-month high (57.5) in November. Employment rises to greatest extent in 17 years. https://t.co/lY3ICXieSp pic.twitter.com/hCY1Dx9uzh
— Markit Economics (@MarkitEconomics) November 23, 2017
Commenting on the flash PMI data, Chris Williamson, Chief Business Economist at IHS Markit said: “The message from the latest Eurozone PMI is clear: business is booming. Growth kicked higher in November to put the region on course for its best quarter since the start of 2011. The PMI is so far running at a level signaling a 0.8% increase in GDP in the final quarter of 2017, which would round – off the best year for a decade.”
Helping sentiment was an overnight report from Bloomberg that Germany’s SPD is “open to talks” with Merkel on forming a government, while a subsequent unconfirmed tweet by an Economist journalist suggested that SPD leader Martin Schultz may resign today, opening the way for another grand coalition.
In terms of sector-specific performance, utilities are the notable underperformers with Centrica (-15%) issuing a profit warning this morning after losing 823k customers in the last 4 months.
