Don’t ignore the PMI’s

Manufacturing PMI’s speak a clear language for the developed economies as they point towards a significant slowdown in the manufacturing sector. While the service sector is holding up well until now, developed economies are due for an economic slowdown. The interesting point is that both equity markets and even more surprisingly bond markets appear to ignore this. If the PMI’s are right, long term bond yields will have to come down from current levels. We position our client portfolios accordingly.