Another day, another drop in the Dow Jones Industrial Average
Pain in Europe
Europe's feeling the pain in particular today because of low numbers out of a survey of purchasing managers. The survey by Markit Economics came in at 48.7 in March after a reading of 49.3 in February. That's concerning because levels less than 50 show a decline in economic activity. Not only was the headline number bad on the survey, but it also showed a contraction in German manufacturing. Since Germany has been the engine powering Europe forward during the recession, that's a troubling sign.
More signs of worry in China
Concerns weren't just limited to Europe, though. Another purchasing manager survey on China's factories conducted by HSBC showed that Chinese manufacturing activity continues to shrink. The survey has been moving south for five months in a row. There's ample evidence that China's economy is slowing -- the question is, to what degree? China last reported GDP growth of 8.9%, and its growth looks to slip even further. The wrinkle is that at levels approaching China's stated target of 7.5%, the country would surely begin using some of the stimulus tools at its disposal. Long story short, while China looks set to see slowing growth, its growth is moving from a "blistering pace" to something "slightly less blistering." My guess is that if China's economy continues retreating, you'll see the country pull out some of the big guns to get the economy moving in the right direction.
Of course, if there's concerns over manufacturing in China, you can bet your bottom dollar that Caterpillar
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