German PMIs Strong!

This morning we received preliminary December Manufacturing and Services PMIs for Germany, France, and the Eurozone aggregate. The data showed broad improvement in Germany (services slightly lighter) and the Eurozone month-over-month, while France declined, which is in-line with our Q4 macro themes #EuroBulls and #GrowthAccelerating in the UK and Germany:

  • Germany PMI Manufacturing 54.2 DEC Prelim (exp. 53) vs 52.7 NOV
  • Germany PMI Services 54 DEC Prelim (exp. 55.3) vs 55.7 NOV
  • France PMI Manufacturing 47.1 DEC Prelim (exp. 49) vs 48.4 NOV
  • France PMI Services 47.4 DEC Prelim (exp. 48.7) vs 48 NOV
  • Eurozone PMI Manufacturing 52.7 DEC Prelim (exp. 51.9) vs 51.6 NOV
  • Eurozone PMI Services 51 DEC Prelim (exp. 51.5) vs 51.2 NOV
  • Eurozone PMI Composite 52.1 DEC Prelim (exp 51.9) vs 51.7 NOV

German PMIs Strong! - a. pmi



For more on our global macro outlook, please see my colleague Darius Dale’s recent note “#GrowthSlowing (Lots of Charts)”.


Domestically in Germany, over the weekend there were further coalition agreements between the center-left Social Democrats and Merkel's conservative party, including key appointments. Merkel could be official confirmed as Chancellor as soon as tomorrow, nearly three months after the election.

  • Wolfgang Schaeuble will maintain his post as Finance Minister (expected)
  • Ursula von der Leyen named Defense Minister – formerly the Labor Minister. We think Merkel may be tapping her as the CDU’s next Chancellor candidate with this appointment
  • SPD Chairman Sigmar Gabriel head of newly configured Economy Ministry

DAX Levels

  • We continue to like German equities via the etf EWG. The DAX held our quantitative intermediate term TREND line of support at 8,876 last week. We’ll be watching for evidence of strength (and a buying opportunity) via an improving positive correlation between the EUR/USD and the DAX.

German PMIs Strong! - eur usd



EUR/USD Levels

  • Trading above its quantitative TRADE, TREND, and TAIL levels = Bullish breakout. etf (FXE)
  • Supported by Fed’s expectation to push out taper = Dollar bearish
  • Supported by positive data from Eurozone (for more see a recent note “Just Charts - #EuroBulls”)

German PMIs Strong! - a. Eur Levels


Matthew Hedrick

Another French Revolution?

"Don't be complacent," writes Hedgeye Managing Director Neil Howe. "Tectonic shifts are underway in France. Is there the prospect of the new Sixth Republic? C'est vraiment possible."

read more

Cartoon of the Day: The Trend is Your Friend

"All of the key trending macro data suggests the U.S. economy is accelerating," Hedgeye CEO Keith McCullough says.

read more

A Sneak Peek At Hedgeye's 2017 GDP Estimates

Here's an inside look at our GDP estimates versus Wall Street consensus.

read more

Cartoon of the Day: Green Thumb

So far, 64 of 498 companies in the S&P 500 have reported aggregate sales and earnings growth of 6.1% and 16.8% respectively.

read more

Europe's Battles Against Apple, Google, Innovation & Jobs

"“I am very concerned the E.U. maintains a battle against the American giants while doing everything possible to sustain so-called national champions," writes economist Daniel Lacalle. "Attacking innovation doesn’t create jobs.”

read more

An Open Letter to Pandora Management...

"Please stop leaking information to the press," writes Hedgeye Internet & Media analyst Hesham Shaaban. "You are getting in your own way, and blowing up your shareholders in the process."

read more

A 'Toxic Cocktail' Brewing for A Best Idea Short

The first quarter earnings pre-announcement today is not the end of the story for Mednax (MD). Rising labor costs and slowing volume is a toxic cocktail...

read more

Energy Stocks: Time to Buy? Here's What You Need to Know

If you're heavily-invested in Energy stocks it's been a heck of a year. Energy is the worst-performing sector in the S&P 500 year-to-date and value investors are now hunting for bargains in the oil patch. Before you buy, here's what you need to know.

read more

McCullough: ‘My 1-Minute Summary of My Institutional Meetings in NYC Yesterday’

What are even some of the smartest investors in the world missing right now?

read more

Cartoon of the Day: Political Portfolio Positioning

Leave your politics out of your portfolio.

read more

Jim Rickards Answers the Hedgeye 21

Bestselling author Jim Rickards says if he could be any animal he’d be a T-Rex. He also loves bonds and hates equities. Check out all of his answers to the Hedgeye 21.

read more