Business

And just like that... hope was gone.

Having soared to post-crisis highs in the months after President Trump's election, Richmond Fed's Manufacturing Survey has crashed (by the second biggest drop ever) in May...

New Order volume growth disappeared, capacity utilization shrank dramatically, Order backlogs disappeared, shipments plunged, and the average workweek tumbled.

Worse still, the expectations index also tumbled with every subcomponent dropping.

Weak Chinese PMIs and 'steady' European PMIs were trump by German IFO exuberance overnight ahead of US PMIs. Having tumbled to their lowest level since September, May preliminary US PMIs were mixed with Manufacturing slumping to 8-month lows and Services rebounding to 4-month highs.

The overall compoosite PMI rose modestly but the divergence betwen manufacturing and services is widening once again (and remember that has never ended well for services)

Last week, ahead of the OPEC meeting, BofA commodity analyst Francisco Blanch said the oil cartel faced three specific choices ahead of its May 25 meeting in Vienna, when it is widely expected to extend the November 2016 production cut:

S&P futures rose alongside European stocks as Asian shares posted modest declines. The euro set a new six-month high and European bourses rose as PMI data from Germany and France signaled that the ECB will have to tighten soon as Europe's recovery remains on track, with the German Ifo business confidence printing at the highest level on record, and hinting at a GDP print in the 5% range. Oil declined after the Trump budget proposal suggested selling half the crude held in the US strategic petroleum reserve.

More details of President Donald Trump's first budget proposal were reported Monday by Bloomberg and Reuters. The leaks add to the picture of what we know about Trump’s budget, which also includes a flurry of leaks published by The Washington Post, the Associated Press and Bloomberg late Sunday, which fleshed out Trump’s plans to slash entitlement spending.