"Stagflation is an ugly thing"

I said this maybe 10 yrs ago that Apple became its own asset class when it was seeing its heady growth rates and each new phone iteration brought massive upgrade cycles. We had stocks, bonds and Apple. It seems that Nvidia is now playing that role.

At least for today, it's weak economic data that is providing some relief on the interest rate front. The manufacturing and service PMI's out of Europe were poor as a downturn in services is now following the weakness in manufacturing. The August Eurozone services index fell under 50 at 48.3 from 50.9 and below the estimate of 50.5. It's the first trip under 50 since December 2022. Manufacturing rose 1 pt but to just 43.7, well less than 50. S&P Global said it was higher inflation that drove the service weakness, "in this sector input prices and thus wages increased at an accelerated pace in August. Meanwhile, stagnating employment combines with decreasing production and results therefore in lower output per head." While manufacturing remains weak, just maybe we're close to a bottom as there was a "slightly better order situation as well as slower destocking." 

Geographically, the Germany composite index fell to 44.7 from 48.5 with the services index in particular dropping 5 pts m/o/m to 47.3 and manufacturing still under 40, let alone 50, at 39.1. S&P Global said for Germany, similar to what they said above, "Stagflation is an ugly thing. However, it's exactly what is happening to the services economy, as activity has started to shrink while prices have shot up again, even picking up pace."