Even as job losses mount and profits plunge, glimmers of stabilization are emerging in global markets, according to a story in the Wall Street Journal. Positive indicators include a small easing in the rate banks charge to lend to one another.
In the U.S., Europe and China, separate surveys of manufacturers’ purchasing managers all inched upward in January, suggesting that the contraction in manufacturing activity could be slowing, according to a story in the Wall Street Journal.
Written by Joellen Perry and Jon Hilsenrath, the story says that interest rates at which banks lend to one another are also easing, and some credit markets are thawing.
Rock-bottom official interest rates, promises of massive fiscal-stimulus packages and central banks’ other efforts to revive markets have helped ease some tensions in financial markets and may help put a floor under falling business confidence, the story says. This means that as government rescue efforts work their way through markets, they could lay the foundation for the global economy to begin escaping the worst of the storm.
Even so, the hints of stabilization are coming in at very low levels, the story says, and the financial system remains fragile. This suggests that the year ahead will be rocky at best, and the hopeful signals could again turn ugly, particularly as employment falls and household incomes are drained.
Bottom line, the story says, these few financial indicators are moving from downright awful to less bad.
WSJ Online subscibers may read the full story here.