Select Page

China’s official Purchasing Managers Index for Manufacturing rose to 52.1 in November. The was up from 51.4 in October. And beat the 51.5 median estimate from economists surveyed by Bloomberg.

The index for the non-manufacturing sector climbed to 56.4 in November from 56.2 in October. That exceeded the median forecast of 56.

In both of these surveys a reading above 50 indicates expansion in the economy.

The picture that emerges is of a Chinese economy that has stabilized in November and that has momentum generated by end of the year consumer spending and government measures to stimulate domestic consumer.

The recovery in the manufacturing sector still looks uneven with some exporters complaining that the strong yuan is damping sales on international markets.

This is generally good news from domestic Chinese companies and many exporters. And it should be good news for international commodities companies that supply raw materials to the Chinese economy.

Those stocks haven’t moved up today–I suspect they’ve been caught in thee general mood of profit-taking after last Friday’s surge.

Shares f China Southern Airlines (ZNH) and JD.Com (JD), two domestic companies likely to profit from an improved Chinese economy, were off 2.35% and 4.35%, respectively, as of 2:30 P.m. today in New York.

Commodity supplies such as copper miners Southern Copper (SCCO) and Freeport McMoRan Copper and Gold (FCX), have also moved lower today losing 1.98% and 0.32%, respectively.

JD.Com is a member of my Volatility Portfolio. I’d be looking to add to my position in that stock if the weakness lasted for a couple of more days or took the share price back near $80 from today’s $85.52. The stock is up 37.25% since I added it t the Volatility Portfolio on July 15, 2020. Southern Copper is a member of my Dividend Portfolio. Those shoes are up 25.98% since I added them to the portfolio on October 13, 2020. They currently pay a 3.29% dividend.

Full disclosure: I own shares of Southern Copper and Call options on JD.Com in my personal portfolios.