U.S. manufacturing growth from Maryland to Virginia is contracting, after a seven-month expansion. China factory growth is at its slowest pace in ten months. Euro-zone manufacturing growth is at its slowest pace in seven months.
All appear to be signs of a global slowdown. But are they?
Goldman Sachs says no. In a note out today fueling gains in crude and copper , analysts from the investment bank say that the global growth story is intact, despite recent contrary evidence.
“We see the current slowdown in economic growth as part of a normal mid-cycle pause, partially driven by higher commodity prices, and therefore not a reason to expect commodity prices to decline substantially,” wrote Goldman Sachs analysts in a note published today. “Further, we believe that the recent evidence of economic weakness represents signs of a slowdown and not a downturn.”
Crude climbed on the report, breaking $100 per barrel this morning. It was off its highs by this afternoon. Brent broke $112 per barrel.
But is Goldman right?
That will be a topic of debate for the Fast Money Traders on tonight’s show at 5PM ET.
It’s worth noting that there are plenty who share Goldman Sachs’ view. Deutsche Bank Chief U.S. Economist and CNBC contributor Joe LaVorgna has long argued that the global economy is not slowing. He’s been bullish on equities, and argued that the U.S. economy is in little danger of a double-dip recession.
“The broadening economic expansion should hold [corporate] profits comfortably in positive territory for some time to come,” wrote LaVorgna in a note to clients today. “Private sector hiring should be significantly higher by mid-year,” he added.
LaVorgna notes that companies are seeing 27% annualized revenue growth, and that about 68% of companies have beat on consensus sales estimates.
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Trader disclosure: On May 24, 2011, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Adami owns (AGU); Adami owns (C); Adami owns (GS); Adami owns (MSFT); Adami owns (NUE); Adami owns (BTU); Terranova owns (XOM); Terranova owns (KSS); Terranova owns (CVI); Terranova owns (OXY); Terranova owns (TM) ; Terranova owns (BJ); Terranova owns (DIS); Terranova owns (PFE); Terranova owns (V); Terranova owns (HPQ); Terranova owns (FLX); Terranova owns (JPM); Terranova owns (MCD); Terranova owns (PEP); Terranova owns (VRTS); Terranova is short (DELL); Karabell owns (AAPL); Karabell owns (GOOG)
For Joe Terranova
Terranova is Chief Market Strategist of Virtus Investment Partners, LTD
Virtus Investment Partners Owns More Than 1% Of (ABAX)
Virtus Investment Partners Owns More Than 1% Of (AMKR)
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Virtus Investment Partners Owns More Than 1% Of (FCFS)
Virtus Investment Partners Owns More Than 1% Of (IGE)
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Virtus Investment Partners Owns More Than 1% Of DOMINO'S PIZZA UK & URL PLC
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For Zachary Karabell
River Twice Capital is short (SHLD)
River Twice Capital is short (GS)
River Twice Capital is short SPY, QQQ
For Brian Kelly
Accounts Managed By Brian Kelly Capital are long (SLV)
Accounts Managed By Brian Kelly Capital are long (VLO)
Accouts Managed by Brian Kelly Capital are long (TLT) calls
Accounts Managed By Brian Kelly Capital are long (ANDE)
Accounts Managed by Brian Kelly Capital are long (MCP) calls
Accounts Managed By Brian Kelly Capital are long (TLT) Calls
Accounts Managed By Brian Kelly Capital are long Australian Dollars
Accounts Managed by Brian Kelly Capital are long (HOC) calls
Accounts Managed by Brian Kelly Capital are long yen
For Dan Dicker
**No Disclosures
For Colin Gillis
*No Disclosures
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