Take your pick in explaining the generalised bloodbath across major equity markets on Tuesday:
- Evidence that the ECB is losing control of the European financial system;
- A shocking decline in the closely followed Conference Board Consumer Confidence Index ® for June in the US;
- Orthe 4.3 per cent decline in the Shanghai Composite overnight, as Agricultural Bank chopped its flotation price…
Then consider this:
Two weeks ago the Conference Board said its newfangled Conference Board Leading Economic Index® (LEI) for China rose 1.7 per cent in April, following a 1.2 per cent increase in March. But the April figure has now been revised all the way down to 0.3 per cent.
So Tuesday’s stock market correction could be put down to a Conference Board Correction®.
The Conference Board, which is a 94 year-old non-profit organisation, blamed a calculation error involving the Total Floor Space Started component of the Conference Board Leading Economic Index® (LEI) for China. Apparently this should have been minus 0.1 per cent in April, rather than the 1.3 per cent reported in the middle of June.
But that explanation jars with this – a breakdown of the components that go into the Conference Board Leading Economic Index® (LEI) for China:
Positive or negative, Total Floor Space Started should not warp the overall indicator reading.
Can someone please Demuddle® us here?
Related link:
US consumer confidence plunges in June – FT
Stampeding to the lifeboats – FT Alphaville