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Technology Stocks : Applied Materials No-Politics Thread (AMAT) -- Ignore unavailable to you. Want to Upgrade?

To: Proud_Infidel who wrote (6612)	8/3/2003 11:46:06 AM
From: Proud_Infidel	Respond to of 25522

Signs of recovery in Europe, Asia Friday, August 1, 2003 Posted: 1357 GMT ( 9:57 PM HKT) LONDON/SINGAPORE (Reuters) -- Upbeat figures from across Europe and Asia on Friday reinforced U.S. evidence that global economic growth is slowly picking up after three years of business angst. British manufacturers reported a return to growth in their sector in July and even in European laggard Germany, retail sales rose and manufacturers said new orders had bounced up. Japan's manufacturing sector expanded in July at its fastest clip in a year; Hong Kong grew in July for the second month in a row after taking a drubbing from the SARS virus; and Malaysia's prime minister stood by a bullish full-year growth forecast. It all added weight to evidence that an economic upturn is taking hold in the United States, where figures released on Thursday on gross domestic product and new unemployment insurance claims beat Wall Street's expectations. "Right across the board we're seeing an improvement not just in business confidence, but that confidence is turning into new orders," said Chris Williamson at NTC Research, which compiles European and Japanese manufacturing surveys for Reuters. Financial markets will look for confirmation from the U.S. manufacturing index, compiled by the Institute for Supply Management, at 1400 GMT. That is expected to bounce back to 51.8, showing renewed growth in the sector, from 49.8 in June. "Obviously we need to wait for the ISM numbers but the data we've collected from the euro area, the UK and Japan are showing a consistent signal that the worst is over," Williamson said. U.S. second-quarter GDP grew at an annual rate of 2.4 percent, beating forecasts of a 1.5 percent rise, but the outperformance was largely due to the fastest surge in defense spending in half a century. Still cautious The Reuters euro zone survey of 3,000 manufacturers showed that better demand in Germany helped to boost the overall index to 48.0 in July from 46.6 in June -- still below the 50 line where growth begins, but above market expectations of 47.0. "When the German machine goes up a gear the others will follow," said NTC's Williamson, adding that promised tax cuts and extended shop opening hours seemed to be making German consumers more interested in spending. "At the euro zone level, I am hoping the PMI will be above 50 in September...there's a good chance of seeing a prolonged upturn now." Financial market economists remain cautious. "There is a question mark about sustainability," said Ken Wattret at BNP Paribas in London. "For the moment it looks as if the leading indicators are turning around, but it's a long way before we see the economy out of the woods." Economists in Asia cautioned that the improvement in the region's fortunes was also likely to be steady rather than spectacular given that the United States in particular was still coping with the bursting of the 1990s investment bubble. "It's not a very exciting outlook right now if you look at Asian GDP," said Jonathan Anderson, chief Asia-Pacific economist for investment bank UBS. "I'm very doubtful that we're going to see anything that looks like the pick-up we had in the first half of 2002," Anderson said. The manufacturing data from Japan and Europe also shows companies aren't confident enough yet to try raising prices to boost their profits. "Right across the board, discounts are still having to be offered for new business," said Williamson at NTC. "If pricing power does begin to pick up in the next month or so, then that would be a very good indication of the sustainability of the upturn."