Doing something you love on a schedule you can’t control can feel the same as doing something you hate :)
Archives of “December 2020” month
rssUK November final services PMI 47.6 vs 45.8 prelim
Latest data released by Markit/CIPS – 3 December 2020
- Composite PMI 49.0 vs 47.4 prelim
The preliminary report can be found here. That’s a modest revision in the final reading but it still affirms that business activity is experiencing a renewed downturn upon the return of lockdown measures last month.
The drop in services output is the first since June but there is a positive, as business optimism reaches its highest level since February (and this is even before accounting for the vaccine news yesterday). Markit notes that:
“New lockdown measures and tighter pandemic restrictions unsurprisingly tipped UK private sector output back into decline during November. However, the collateral damage on areas outside of hospitality, leisure and travel has been far more modest than in the first lockdown period. Back in April, nearly 80% of all service providers reported a monthly drop in business activity, while the equivalent figure was only 30% in November.
“The final Services PMI reading is also almost two points higher than the earlier ‘flash’ estimate of 45.8, highlighting that the speed of the downturn was not as steep as suggested by the early responses to the survey in November. Overall service sector output was still severely impacted by widespread business closures among consumer-facing service providers, but other types of firms often commented on successfully adapting to the new lockdown restrictions and seeing a reduced impact on client spending than initially expected.
“Hopes that the pandemic will be brought under control from an effective vaccine resulted in a sharp improvement in business optimism during November. Across the UK private sector as a whole, confidence about the year ahead outlook reached its highest since March 2015. That said, survey respondents also cited rising business uncertainty in the short-term, largely due to ongoing restrictions on trade, which contributed to another round of job cuts and efforts to rein in discretionary spending during November.”
Eurozone November final services PMI 41.7 vs 41.3 prelim
Latest data released by Markit – 3 December 2020
- Composite PMI 45.3 vs 45.1 prelim
The preliminary report can be found here. A slight revision higher but it still reflects the sharpest drop in the services sector since May, as tighter virus restrictions across the region weighed on economic activity.
The sharp contraction in the services sector was particularly notable in France, Italy, and Spain while the decline in Germany is offset by the robust manufacturing performance.
Markit notes that:
“The eurozone economy slipped back into a downturn in November as governments stepped up the fight against COVID-19, with business activity hit once again by new restrictions to fight off second waves of virus infections.
“However, this is a decline of far smaller magnitude than seen in the spring. Unlike earlier in the year, manufacturing has so far continued to expand, buoyed in part by recovering export demand, and the service sector is also seeing a much shallower downturn than during the first lockdowns.
“The relative resilience of services in part reflects spill-over demand from the manufacturing sector for transport and other industrial support services, but also reflects the looser lockdown measures compared to those seen earlier in the year. “The fourth quarter will nevertheless likely see the eurozone economy take another major step backwards, with especially steep downturns suffered in France, Spain and Italy.
“Encouragingly, growth expectations have lifted higher, as vaccine developments fuel optimism that life can start to return to normal in 2021. It’s anticipated that business and consumer spending will start to rise as the outlook brightens, though a high degree of caution is expected to persist for some time to come.”
“United States Treasury borrowing on a no-interest and negative interest basis (NYT. January 1, 1939. Page 42.).” Negative rates, not so uncommon.
US coronavirus – Los Angeles announces a city-wide lockdown stay at home order
Essential businesses only to remain open
- all travel including on foot, bicycle, scooter, motorcycle, auto or public transit is prohibited
US media reporting.
- All residents within the city of Los Angeles were ordered to remain in their homes effective immediately
- previous “safer-at-home” order was withdrawn and superseded by the new one
- Many residents were notified with an email and text alert from the city’s NotifyLA System Wednesday night
- The city of Los Angeles sent out a text alert on Dec. 2, 2020.
- People may lawfully leave their residences only to engage in defined essential activities.
The road is long and hard and frustrating at times. But, it’s worth it! From “The Perfect Speculator” – Brad Koteshwar
China Caixin/Markit PMIs Services 57.8 & Composite 57.5 for November
These are the results of a privately-conducted survey, which differs to the official survey (in a nutshell this one leans more towards smaller sizes firms)
Services jump to 57.8
- expected 56.4, prior 56.8
Key points highlighted by IHM / Markit:
- Substantial rise in business activity amid quickest increase in new work since April 2010
- Employment growth strongest since October 2010
- Input costs rise at sharpest pace for over a decade
Composite no slouch, to 57.5
Richer people get a higher risk-adjusted return on their investments.
S&P 500 bear markets.
S&P 500 valuation.
