Entrepôt economy points to recession

I've talked before about entrepôt economies or cities.  They're trading cities which depend on trade in their surrounding regions and around the world.  Cities like Vienna, Hong Kong and Singapore these days and Venice, Dar-es-Salaam in the past.  (I talked about them here and here).  This makes them especially sensitive to economic conditions in the regions they serve.  The PMI (purchasing managers index) for Austria comes out a few days before the final pan-Europe PMI, and correlates well with it.  It fell below 50 for the first time since 2012 this month, which would signal the onset of a recession.  (I explain about diffusion indices and PMIs here)

A recession now in Europe would be difficult to stop.  The ECB's (European Central Bank) discount rate is already at zero, deficit spending is constrained by the "stability pact", and with other large world economies slumping (China, the USA, Japan) it's hard to see what will reverse this downtrend.  As indeed, this article points out.  For obvious reasons, I remain bearish on equities.