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EU and US PMI

The Eurozone as a whole has suffered a stark reductioin in it's manufacturing and service sector PMI data released yesterday. For thie who don't know, PMI is an index based on a survey of the top 400 execs within a certain industry, for example manufacturing or services, which will be focused on here.

This number acts as a momentum oscillator around the 50 mark where above or below that benchmark indicates bullish or bearish trends based on 5 factors:

  1. new orders

  2. inventory levels

  3. supplier deliveries

  4. employment

  5. production

Each given eaqual weighting this comes out to a good statictical average for the beating of the heart of an industry.

The manufacturing PMI of Europe fell 16.5 points, or 54.5% over the last month due to restrictions imposed on the factories outputs, landing at a meer 13.5 PMI number. It's service sector PMI even lower at a PMI of just 11.7, the largest drop in it's hitory. Germany, France, Italy, and Spain leading the drop as the largest losers in this case. And here at home? The US is in the same boat with a 32.2% contraction down to 27.0 from just under 40 last month.
US PMI for April 2020

EU PMI for April 2020

Treasury Restricting PPP Loans

As noted above, employment is one equal part of the equation calculating PMI. Many publicly traded companies have taken advantage of this free money in order to front overhead costs that they cannot afford.

With a restricted access policy which is certainly coming after reports of hedge funds and multimillion dollar companies taking advantage of the program, there will be yet another contraction in PMI to come in the US as covering costs for furloughed employees because too large of a burden for the larger corporations to bear.

Also worthy to note the continuing developments in the oil market which has rebounded slightly to ~16 dollars, well below the $50/barrell needed for Saudis to break even. This will continue to permeate the economy. Negative futures prices are an unprecedented sign of the times, and do not give a positive outlook in cpnfluence with other current trends.

BTC Bearish Amid Traditional Market FUD

Correlation between the Dow and BTC getting fuzzier every day. In the last three days we have seen a 12% increase in BTC where as the Dow is currently down -2% in the same period with a low of -4%.

BTC Chart 4-24

BTC having a string day yesterday posting +350 gains and closing around 7480 with highs in the 7700 range. An initial pullback today could be in the cards to shake out some of the weaker hands and allow for better entries in the 7200 range. Overall this seems like a set up to advance to the 7500-9000 range, which if reached would make BTC the fastest asset to reclaim pre-march levels.

Invalidation would be seen in a break below 7k and confirmed with a retest of the level resulting in a S/R level flip.