I have now driven over three thousand miles in Spain, a country roughly 800 miles x 800 miles, so I’ve seen quite a bit of the land mass. One thing that has impressed me is the acreage dedicated to wind power. “Windmills” are everywhere, and, frankly, I don’t find them visually offensive, given that the power generated is green, meaning non-polluting and otherwise clean. The country is the third largest producer of solar energy in the world, as well. Spain may be fiscally unsound at the moment, but in time, this kind of investment will surely have a big payoff.
Spain created history when more than 50% of its power requirements were met by wind energy which is a first by any country.
The reaction of the market to yesterday’s US manufacturing data signaled to me that it really wants to go higher. Maybe this is a bit premature, but it seems investors are almost done reading the schedule and are thinking it’s almost time to board the train. The rest of the week will give us more information on this notion as the economic data rolls into the station.
The U.S. Institute for Supply Management’s index of national factory activity rose to 53.4, topping forecasts. A reading above 50 indicates expansion. Production accelerated to a three-month high and a gauge of factory employment climbed to the highest level since June, 2011.
Oh, I almost forgot to mention China in this review of the market. What an oversight, considering the doomsayers have predicted that China will have a hard landing in its attempt to reverse its inflation. True, one report does not a soft landing make, but when it comes on the heels of several not-so-good reports, well …
China’s Purchasing Managers’ Index hit an 11-month high.
For so long now, common wisdom has suggested China is the engine of the global economy. It is one of those cases where if you say it long enough and loud enough, people begin to believe it is true. Certainly China is an important piece, and certainly China is one big reason the global economy weathered the recession following the financial collapse, but consider this – China’s GDP is roughly $5 trillion and the US GDP is roughly $15 trillion. Now, think about the global economy in these terms and it is plain to see that if the US continues its economic momentum, China will follow right along. Add to this the potential of Europe to begin an earnest economic comeback, and the ingredients for a major turn in the economic cycle are all dropping into the pot. For just a bit of extra kick, let’s add a scoop of Brazil, a pinch of Russia, a sprig of India, and a hint of South Africa. Now the stew is beginning to simmer.
Emerging Europe’s manufacturing sector showed a surprising surge in March, bucking a trend of decline in the euro zone and defying expectations that a slowdown in the car- and electronics- producing region would accelerate. A crucial part of the European supply chain, Poland, the Czech Republic, and Hungary are handcuffed to global demand, declines in which have caused policymakers to slash growth forecasts and look for ways to shore up budget revenues. But Purchasing Managers Index (PMI) data showed all three had shrugged off PMI falls in Germany and the wider euro zone.
Hmmm … I don’t think it will hurt to add a bit more flavoring to the economic stew, do you?
Trade in the day – Invest in your life …
