NEW YORK (TheStreet) -- Doug Kass of Seabreeze Partners is known for his accurate stock market calls and keen insights into the economy, which he shares with RealMoney Pro readers in his daily trading diary.Among his posts this past week, Kass explained why Apple's Black Friday sale was no big deal and why recent global economic data contradict the doomsayers. Please
Originally published on Friday, Nov. 23 at 8:17 a.m. EST. I forgot to post this poor assessment of Microsoft's ( MSFT) Surface tablet on Tech Crunch from earlier this week, "An iPad Lover's Take on the Surface With Windows RT." And speaking of Apple ( AAPL), the company's Black Friday savings is only $7 on earphones to $101 on a $1,600 laptop -- kind of a so-what sale. > > Bull or Bear? Vote in Our Poll I would construe the lack of big Black Friday sales at Apple as a thin reed but mildly positive indicator that demand is quite strong. At the time of publication, Kass was long AAPL.
The World Keeps Turning
Originally published on Friday, Nov. 23 at 7:39 a.m. EST.
In ChinaThere were positive data from China on Wednesday evening, suggesting that China's economic growth has bottomed and is mildly accelerating. To some degree, an improving economy in China underpins global economic activity. In response to the data release, China's equity market cut its decline and has risen further overnight. The flash November HSBC manufacturing index for China was 50.4 vs. 49.5 in October. The current reading is the best in 13 months and signals that the government's manufacturing index to be released Nov. 30 should be above 50 for its second straight month. Other metrics as well point to an improving Chinese economy -- for instance, retail sales, industrial production and money supply growth have all accelerated year over year based on October data, and exports in October grew at their fastest pace in the last five months.
And in the EurozoneThe euro area composite (manufacturing and services) flash index for November was released Thursday morning. The index was 45.8 vs. expectations of 45.7 and October's 45.7. The manufacturing sector was strong, with that component lifting by 0.7 points in November, and the service component was modestly weak, declining 0.3 points. The improvement in the manufacturing component was broad based, as the employment/new orders/production metrics all increased in November. As I pointed out a week ago, the euro area composite index has been about flat since April. Despite the hyperbole, the region's economy is contracting at a very modest pace, and the weakness is no longer accelerating. The November composite index is consistent with quarter-over-quarter real GDP growth of minus-0.2%, in line with the prior few quarters. Not great but not the end of the world either.
Bottom LineThe various purchasing managers' indices in the U.S., Europe and China are indicative of a global economy in which growth has either stabilized or is slightly accelerating. Global real GDP growth in 2012 should be about +3%, and the rate of growth in 2013 should increase very modestly from those levels. Salient conclusions:
- The odds of a U.S. recession are still low (despite the threat of a fiscal cliff).
- The odds of a hard landing in China have materially diminished.
- The rate of contraction in EU economic growth is decelerating.
- Global economic growth will be on the order of +3%, providing a tailwind to earnings growth (my one remaining concern).
- Weak earnings growth will be somewhat countered by global easing, insuring that excess liquidity provides a cushion to downside in risk assets.