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Is China heading for another interest rate cut?

Traders are getting disappointing economic reports from Japan, China, and the euro zone.

I thought a weaker euro would support exports? Yet eurozone PMI data was below expectations, as new orders slowed.

And what about China? Its PMI fell to its lowest level in a year, to 49.2 from 49.6 in March. A reading below 50 indicates contraction.

That means more stimulus. On Sunday China's central bank cut the reserve requirement ratio for banks, which frees up more money for lending.

It sounds like a cut in interest rate is coming next.

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Elsewhere:

1) There's pretty clear evidence that the slowdown in the energy drilling business is affecting economic activity. We heard as much yesterday from United Rentals. Today we heard from homebuilder Pulte, which reported earnings and revenues below expectations.

More importantly, overall orders were up 6 percent, fair but not great. But look at the weaker sales in Texas.

Pulte orders:

  • Southeast: up 14 percent
  • Southwest: up 9 percent
  • North: up 12 percent
  • Texas: down 5 percent

That's a clear sign the slowing energy business is hurting.

  • Bob Pisani

    A CNBC reporter since 1990, Bob Pisani covers Wall Street from the floor of the New York Stock Exchange.

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