banner

Ticker

* Cotações com atraso superior a 15 minutos via Bats CHI-X Europe e NASDAQ Basic

MACRO PATRIS - Markit composite PMI drops below 50 in Italy, suggesting that the economy contracted in October

6 Nov 2018

noticias/noticia3.jpg

Eurozone: October Final Markit Services/Composite PMIs

Bottom-line: The Markit Eurozone composite PMI was revised higher by 0.4 points in October from the flash reading to 53.1, reflecting the revision to the German composite PMI. This leaves the PMI for the euro area 1 point below the September reading and 1.2 points below the 3Q18 average. This is also the lowest level for more than two years, suggesting a weak pace of output growth for the region at the beginning of 4Q18 (although slightly above the 0.2%q/q pace of expansion reported as a flash estimate by the Eurostat for 3Q18).

Both manufacturing and services sectors PMIs eased on the month. By countries, Ireland showed the strongest level, despite the fact that the index fell to a seven-month low. Activity in Germany eased to a 5-month low and the joint lowest in over two years. The reading for Italy came out in contractionary territory.

In the services sector, the PMI reached the lowest level since the start of 2017. The incoming new work component remained solid, although at the lowest since May. The employment component eased only slightly from September’s near 11-year high.

Details:

Spain: Markit composite PMI rose by 1.2 points to 53.7 in October (the strongest since June), on the back of 1.5 points increase in the PMI for services sector. Consensus expected a slight decline on the month to 52.2. The October reading compares to a 3Q18 average of 52.7, suggesting some improvement in output growth at the beginning of 4Q18.

The press release disclosed by Markit showed stronger growth of incoming new business. The employment component reached the lowest level for two years. Business confidence for the year-ahead was little changed. Firms reported increases in the price of fuel and energy, plus higher labour costs, while output charges rose only slightly. Margins remained under pressure.

Italy: The Markit/ADACI Italy Services PMI recorded a large fall in October (-4.1 points to 49.2, vs. consensus 52.0). This is the first reading in contractionary territory since May 2016 and the lowest level since September 2014. The Markit/Composite PMI declined by 3.1 points to 49.3 (vs. consensus 51.0). This is the first reading below 50 since December 2014 and the lowest since November 2013.

The details of the survey showed that selling prices declined for the ninth consecutive month (although remaining marginal), while operating costs increased, which squeezed services companies’ profit margins. The input prices component eased after September’s 40-month high. New business at Italian service providers grew only marginally in October. This was the lowest reading for this component for over three-and-a-half years, with a number of companies reporting subdued client demand according to the press release disclosed by Markit. The employment component eased on the month and reached a 14-month low. Business confidence remained solid in October, with over a third of businesses expecting activity to be higher in a year’s time.

Other countries: The final reading for the Markit composite index in France was revised lower from the flash reading (-0.2 points to 54.1), which leaves the index broadly stabled compared to September (54.0) and slightly below the 3Q18 average (54.4). In Germany, the Markit/BME composite PMI was revised upwardly by 0.7 points to 53.4, which reduces the monthly decline to 1.6 points. The October reading compares to a 3Q18 average of 55.2. The composite PMI for Ireland fell by 2.3 points to 56.1, the lowest reading since March and 1.8 points below the 3Q18 average.

--------------------------------------------------------------------------------------------------------------------------------------------------------

For further information, or to receive the PDF file, please contact +351 912 897 835 or research@fincor.pt

Disclaimer

The information and opinion contained in this report was prepared by PATRIS - SOCIEDADE CORRETORA, SA ("Patris"), which is part of the group of companies whose holding is PATRIS INVESTIMENTOS, SGPS, SA (Patris Group), listed in Alternext, which holds 100% of the share capital and voting rights of REAL VIDA SEGUROS SA which, in turn, holds 100% of the share capital and voting rights of Patris.

The information contained herein is based on publicly available data obtained from sources believed to be reliable and has not been subject to independent verification. To the extent permitted by applicable law, Patris does not expressly or impliedly guarantee the accuracy, completeness and / or correctness of such data, or any omission. This document, or part thereof, may not be (i) modified, (ii) transmitted or distributed or (iii) copied or duplicated by any means or means, without the prior written consent of Patris.

The analysts involved in the preparation of this report did not receive, receive and will not receive any compensation, direct or indirect, based on the information contained in this report.

PATRIS - SOCIEDADE CORRETORA, SA or another company of the Patris Group or its respective shareholders, management, and / or employees may carry out personal transactions on the securities referred to in this report, at any time and without prior notice.

Any opinion contained in this report may be outdated as a result of changes in market conditions, applicable laws and other factors. It should also be considered that the analyst may make changes to the estimates, assumptions and evaluation methodology used.

This report has been prepared for information purposes only, not taking into account the specific investment goals, financial situation and particular needs of any specific person who may receive the report. This report therefore has no specific recipient.

Patris is subject to high internal standards of behavior associated with the capital market, prepared on the basis of the applicable legislation of the Portuguese State and the European Union, which include rules to prevent and avoid conflicts of interest and barriers to the disclosure of information.

Investors should bear in mind that the rate of return on the securities identified in this report - if any reference is made to those returns - may vary and the price of such securities may rise or fall. Investors should thus be aware that they may receive less than initially invested. While this report may refer to the historical performance of securities, past performance is no guarantee of future performance. In addition, market conditions, applicable laws and other factors that have an effect on performance are all likely to change, with the consequent change in the information contained in this report. Patris or any other company of the Patris Group does not accept, to the extent permitted by applicable law, any liability, whether direct or indirect, resulting from losses that may arise due to the use of the information contained in this report.

Patris's activity is overseen by the Bank of Portugal and the Securities Market Commission. 

Voltar