Disappointing Eurozone PMI
The Markit Eurozone Manufacturing PMI report did not have a single good thing in it. Not only did the region's activity contract, it also contracted in most of the eurozone's largest nations by gross domestic product. Along with a string of data about financial trouble, high unemployment, falling wages and labor unrest, the report will used by many proponents of austerity to prove their case. Europe needs stimulus to be lifted out of what could be the second deep recession in five years.
The Markit PMI report said:
Eurozone manufacturing started the second quarter of 2013 on a weak footing, with conditions in the sector deteriorating at the sharpest pace in the year-to-date.
At 46.7 in April, down slightly from 46.8 in March, the seasonally adjusted Markit Final Eurozone Manufacturing PMI signalled contraction for the twenty-first successive month - despite edging up from the earlier flash estimate of 46.5.
All of the national PMI indices signalled contraction in April. Rates of decline accelerated in Germany, Ireland and Austria, but eased in France, Italy, Spain, the Netherlands and Greece. The four worst performing nations nonetheless remained France, Italy, Greece and Spain
The fact that France could be mentioned in the same sentence as Greece and Spain is the most unsettling of all the data.
Lenovo-IBM Talks End
Chinese computer firm Lenovo will not buy the troubled server division of International Business Machines Corp. (NYSE: IBM). The unit is considered one of IBM's worst performers. The U.S. firm would have been well rid of it. As usual with most corporate sales negotiations, the breaking point of the talks was price. CNN Money reports on the Lenovo-IBM talks:
News of the negotiations surfaced last month in various publications and were confirmed by Fortune. Bloomberg put the value of the potential deal, which would cover IBM's sale of its so-called x86 server business, at between $2.5 billion and $4.5 billion. Others suggested IBM was seeking as much as $6 billion. Lenovo is said to have balked at the price tag for the business, which generates close to $5 billion in sales, or about a third of IBM's overall server revenue, according to estimates.
Ford Pickup Sales
Sales of the Ford Motor Co. (NYSE: F) F-150 flagship pickup have surged so strongly that the U.S. car company will add workers to build more of them. Analysts have noted that much of the increase of sales in the American market this year is due to light trucks, SUVs and pickups. Most get poor gas mileage, so the trend is hard to explain. When Ford reported April sales, it noted:
Sales of America's best-selling pickup, the Ford F-Series increased 24 percent, with 59,030 pickups sold. This represents F-Series best April sales results since 2006. It also is the 21st straight monthly sales increase for F-Series - with sales up 19 percent year to date.
USA Today reported on the Ford jobs added:
Spurred by a booming market for fullsize pickups, Ford Motor says it will add a third crew of 900 workers at the suburban Kansas City factory that builds F-150 pickups.
"Fullsize truck sales are growing three times as fast as the industry," says Joe Hinrichs, Ford Motor executive vice president and president of The Americas. "There's strong (economic) growth and housing starts are up."
Ford also confirmed it will begin production late this year of its Transit fullsize van at the Kansas City assembly plant, located at Claycomo, Mo. That will add more than 1,000 jobs there.
After years of huge layoffs, this news is a modest victory for car workers.
Filed under: 24/7 Wall St. Wire, Market Open Tagged: F, IBM