The big news from yesterday was that manufacturing continued its downtrend.
Global manufacturers stalling, soft patch persists
Factory activity across the world fell to its lowest level in almost two years in May, raising concerns about a protracted "soft patch" in the global economy and depressing long-term interest rates... Only Japan bucked the trend...
A global Purchasing Managers Index (PMI), which aggregates all national surveys and is compiled by JP Morgan, fell to 51.1 from 51.9 in April -- still just above the 50 level representing the divide between contraction and expansion... In the United States...the Institute for Supply Management's May manufacturing index fell to 51.4 from 53.3 in April... The euro zone PMI fell to a 22-month low of 48.7 in May, after slipping below the 50 watermark in April...
Bill Cara commented that the ISM trend "should be interpreted one way, and one way only: Good jobs are disappearing".
Data from the Office of Federal Housing Enterprise Oversight (OFHEO), though, show that house prices continued to rise in the US in the first quarter while the National Association of Realtors report that the Pending Home Sales Index, supposedly a leading indicator for the housing market, has risen to 128.2 in April, the highest level on record.
Calculated Risk looked at house prices in the US in terms of the price-rent ratio and concludes that "housing is overvalued in most of the United States and significantly overvalued in the larger metropolitan areas".
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