Global Recession Fears Revive Amid Dismal Economic Reports

Signs of a slowdown are starker still overseas, meanwhile, as the leading index of Euro zone manufacturing activity fell to 50.4, barely registering a pulse, from 52 in June.

Markit Economics, which publishes the index, said “The slowdown was broad-based, with almost all of the national PMI indices coming in lower than their respective June levels,” meaning that weakness was across the board, including even Germany which was a reserve of relative manufacturing strength earlier in the year.

The news in China, which has become synonymous with manufacturing in today’s globalized economy, was perhaps Monday’s most worrisome report. The HSBC China Purchasing Managers’ Index showed contraction in July, falling to 49.3 from 50.1, and registered the lowest reading in manufacturing activity since March 2009. In a summary of Chinese performance, the HSBC survey said, “total new order growth eased to near-stagnation amid reports of lackluster global demand.”

With the economy already heaving under weak housing and construction sectors and now slowing manufacturing, all eyes will be on new earnings reports and a string of government economic reports this week. Of greatest interest perhaps, the Labor Department releases July unemployment data on Friday.

In a bellwether move on both these fronts–earnings and employment– Europe’s largest bank HSBC reported a sharp 36% rise in earnings Monday, but said it would cut 30,000 jobs globally to trim costs and maintain profitability. HSBC also operates 470 branches in 13 U.S. states, most of them in New York. The cuts will affect U.S. branches, though the bank plans to increase hiring in Asia and Brazil.