August 30, 2016

Financial Asset prices vs Real Economy divergences

It looks from my perch like the schism between financial-asset prices and the U.S. real economy is growing ever wider.

For example, we got word Tuesday that Markit's U.S. Manufacturing PMI declined to 52.1 in August from 52.9 in July. That's below the 52.7 reading that analysts had expected. Manufacturing employment also saw its slowest growth in four months, while new orders declined even though exports increased.

And yet, Mr. Market remains nonplussed. For now.

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