Sunder’s List – The Slowdown Special

Will the US enter recession before the end of this year? Estimates of revenue growth for the largest US companies are being scaled back sharply by Wall Street analysts. The reduction in growth expectations for leading blue-chips to their lowest level since late 2008 and early 2009: Analysts expect average revenue growth will rise at an annual rate of 1 to 1.5% during the third quarter for the companies in the Dow Jones Industrial Average. That’s below the current inflation rate and down from a forecast of 4 to 6% at the start of the year.

Top U.S. steelmakers are facing falling demand and profits. ArcelorMittal, the world’s largest steelmaker and among the largest in the U.S., has told the union it wants to cut wages and benefits for all workers.

Hussman: “a broad array of observable evidence suggests extraordinary strains in Europe, and abrupt though expected deterioration in U.S. economic activity.”

Britain is in its second recession since the 2007-2008 financial crisis, and the prospects for a recovery are cloudy as leaders in the euro zone, Britain’s biggest trading partner, are still far from resolving their debt woes.

Six of the 17 countries that use the euro currency are in recession. Europe’s slowdown is hurting factories in China. Chinese exports to Italy dropped 24% in June from a year earlier. Exports to France fell 5%, those to Germany nearly 4%. Europe buys about 17% of China’s exports.(ET)

Understanding the China Slowdown

China’s growth has fallen to 7.6%, its slowest since 2009. The slowdown has already manifested itself in different ways around the world. (FT)

A one percentage point slowdown in China’s annual GDP growth is associated with a 1.2 percentage point deceleration in the average growth rate of the seven largest commodity exporting economies in Latin America (Argentina, Brazil, Chile, Colombia, Peru, Venezuela and Uruguay). (FT)

Meanwhile in India, all eyes are now on the government to come through with some bold economic policies to get India out of the rut (good luck with that!)

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