![A boost in China's domestic tourism during the dragon boat festival has failed to deliver much needed stimulus. Picture via Shutterstock A boost in China's domestic tourism during the dragon boat festival has failed to deliver much needed stimulus. Picture via Shutterstock](/images/transform/v1/crop/frm/37uSWs3eyNM24fqefKJaatC/b41d991f-c0c5-4cd7-b771-c91de4dff3f0.jpg/r0_0_3071_2047_w1200_h678_fmax.jpg)
The S&P Global Purchasing Managers Index (PMI) was released on Friday, which showed a larger decline than was expected.
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PMI is a survey-based indicator which asks senior manufacturing and services executives questions about business conditions and whether they are improving or deteriorating.
Headline PMI is scored out of 100, with a score above 50 seen as expansionary and a score of less than 50 as contractionary. The Eurozone composite PMI slipped to 50.3 from 52.8 the previous month.
Within the score, manufacturing fell to 43.6, while services saw a substantial fall from 54.5 to 52.4. The weakness was led by France, whose services PMI surprised expectations by coming in at 48.
However, Germany also saw both manufacturing and services PMI fall. In the US, while services PMI was in line with expectation, manufacturing fell to 46.3 against the 48.5 forecasted.
Equity markets overall were lower last week, with all major indices showing negative returns.
Fears around China's growth outlook have not yet been met with any substantial fiscal stimulus announcements, which is concerning news for investors as the Hang Seng fell by 5.74 per cent over the week.
A boost in domestic tourism during the dragon boat festival also failed to deliver, as reported revenue was 94.9pc of the amount recorded in 2019, prior to the pandemic.
Across other equity markets, European indices struggled, with Germany's DAX falling by 3.23pc and the Eurostoxx 50 by 2.80pc over the week.
In US markets, the results weren't quite as negative. However, both the S&P500 and NASDAQ failed to generate anything positive, down 1.39pc and 1.44pc, respectively.
Last week Federal Reserve Chair Jerome Powell gave his semi-annual testimonial to the Senate where his messaging didn't stray too far from his previous comments.
Powell addressed the Fed's decision to skip a rate rise in June despite signalling for more to come. He also stated that "reducing inflation is likely to require a period of below-trend growth and some softening of labour market conditions".
There are important updates on inflation coming up from across the world, which include Japan, Canada, Europe and the US, all of which will be closely scrutinised by markets and central banks for the latest read on how sticky services price inflation is.
- This article does not take into account the investment objectives, financial situation or particular needs of any particular person. Before acting on any advice contained in this article, you should assess whether it is appropriate in light of your own financial circumstances or contact your financial adviser. Christopher Hindmarsh is an adviser at JBWere Limited. JBWere Limited AFSL 341162.