China slows a “wee bit”–but that’s too much for an already nervous market
Growth in China’s economy has slipped to the lowest rate since 2016. Which isn’t huge negative news except that Chinese financial markets are already nervous enough to have pushed Chinese stocks into a bear market. In the second quarter of 2018 annual...
China actually seems to be deleveraging
China’s financial system certainly isn’t out of the woods yet, but the country has made substantial progress in moving away from a potential banking crisis, according to the Bank for International Settlements. The BIS, often called the central banks’...
China plans for slightly slower growth in 2018
Meeting in Beijing today, the National People’s Congress approved plans laid out by President Xi Jinping and Premier Li Keqiang to set the target for economic growth at 6.5% for the next year and to reduce the government deficit to 2.6% of GDP from the 3% of the...
Possibly meaningless Chinese economic data lead global markets down
Overnight numbers showed that China’s purchasing managers index for manufacturing fell to 50.3 in February. That was down from 51.3 in January and the biggest drop in five years. Economists surveyed by Bloomberg had expected a reading of 51.1 in the index. The...
China’s stocks fall on fears that government won’t intervene as vigorously now that the 19th Party Congress is over
Over night Chinese stocks fell the most since early August. Sovereign bonds led the way lower, extending a monthlong retreat on fears that the government will step up efforts to reduce leverage in the financial system. The Shanghai Composite was down by as much as...
Weaker than expected expansion in China’s economy–problem seems to be in private sector
The Caixin Service Sector Purchasing Managers Index fell to 50.6 in September. That’s the lowest level since December 2015 and 2.1 points below the August survey. In this index anything above 50 indicates that the economy or the sector is expanding so...
Latest data say China’s economy slowed in July
Reports released by China at 10 p.m. New York time Sunday show China’s economy slowing in July. Industrial output rose 6.4% year over year. Industrial output grew at an annual 7.6% in June. Economists had projected 7.1% growth in output. Retail sales, another...
China economic data too good to be true?
Talk about hitting your marks! Second quarter GDP grew in China at a 6.9% year over year rate, Beijing reported over the weekend. The consensus projection called for 6.8% growth. In the first quarter China’s GDP grew at 6.9% year over year. In June Fixed Asset...
China bullish infrastructure rhetoric overshadows weak economic data
Add China to the list of those markets (oil being another example) where rhetoric is more important for setting market direction than data. Yesterday the Chinese government released generally disappointing economic numbers. Industrial output, for example, rose by 6.5%...
Remember that Trump/Xi meeting last week? The results were lost in the news over U.S. missile strikes against Syria but they are important
It was easy to overlook the results of the meeting at the Florida White House between U.S. President Donald Trump and Chinese President Jinping on Thursday and Friday of last week. A joint announcement of any results could easily have been lost in the thunder of those...
China’s growth target: More of the same but a little less
China’s government has announced its new economic growth target for 2017. At “around” 6.5% it’s just a bit lower than the 2016 target of 6.5% to 7%. China’s GDP grew by 6.7% in 2016. The slight decline in the headline growth target is...
China’s foreign exchange reserves fall below $3 trillion
It’s mostly symbolic, but in financial markets symbols count. In January China’s foreign exchange reserves dropped below the $3 trillion mark for the first time in almost six years, the People’s Bank of China announced today, February 7. The drop, the...
With 6.8% GDP growth in fourth quarter, China hits 2016 target–exactly
You weren’t expecting anything else, were you? With China’s once every five years Communist Party leadership shift coming up this year, official figures released last night showed China’s GDP growing at a 6.8% rate in the fourth quarter. That puts the...
China’s export engine falters again
Calculated in yuan, China’s exports rose a tepid year-over-year 0.6% in December. Unfortunately, China’s export companies don’t pay for raw materials such as oil and copper or for subassemblies from Malaysia or Indonesia in yuan but in most cases in...
Economy and financial markets point in different directions ahead of Wednesday’s Fed meeting
Pity the poor Federal Reserve. In making decisions about interest rates–in this case about whether or not to raise interest rates at its June, July or September meetings–it has to consider the condition of both the real economy and the financial markets. And right now...
UK voters decide to leave European Union–What’s next (Part 1 short term effects)?
By a surprisingly large margin of 52% to 48% the United Kingdom voted to leave the European Union in Thursday’s Brexit referendum. Global financial markets plunged in a decline all the more dramatic because traders and investors had decided on Wednesday that the...Can China's biggest companies become true global players?
The next six months will test the power—and the limits of that power—of China’s global champions. First, sometime in early 2011 California will decide what company will build the high-speed rail link between Los Angeles and San Francisco. The Japanese companies that...China's banks on the hook for $260 billion in local-government bad loans
That’s one huge bad loan problem. 23% of the $1.1 trillion that Chinese banks have lent to infrastructure projects backed by local governments are likely to go bad, an unnamed source with access to government data has told Bloomberg. The works out to about $260...Chinese credit rating company lets S&P, Moody's, and Fitch have it right between the AAA
“The western ratings agencies are politicized and highly ideological and they do not adhere to objective standards,” Guan Jianzhong, told the Financial Times yesterday. Absolutely true, of course. Standard & Poor’s, Moody’s, and Fitch Ratings, the big three U.S....China's growth slows to 10.3% showing Beijing's policies are working
Good news this morning in China’s report of second quarter GDP growth. Although by no means definitive good news. That is still a quarter or two away. China’s economy grew by 10.3% in the second quarter. That was down from a clearly unsustainable 11.9% in the first...Up yesterday, down today as Shanghai waits for China's GDP news
Live by the rumor; die by the rumor. Maybe they ought to engrave that above the entrance to the Shanghai stock exchange. Yesterday, July 12, the Shanghai Composite index climbed 0.8% to the highest level since June 28 after newspaper reports, essentially unsourced...Shanghai moves deeper into bear country–so when's the rally?
Traders have been watching the 2500 level on the Shanghai Composite Index closely for the last week. And today they got the price action they feared. The index dropped another 4.3% today to close at 2427. That’s below both the psychologically important 2500 level....China's stocks resume their retreat as old fears re-emerge after yuan news
End of the yuan to dollar peg? China’s currency to appreciate? That story is so last week. The stock market action in China over the last couple of days is back to the same old, same old: Worries over global economic growth, worries, that China’s government will pull...China reverses another policy and starts new buying of U.S. Treasuries again
China’s decision to end a strict yuan-dollar peg is getting all the headlines today—even though the likely appreciation of the yuan versus the dollar is in the vicinity of 3% or so in 2010. That’s hardly a game changer. But the bigger China-U.S. news dates back a few...Buy or wait in China? My indicator edges toward buy–ever so slightly
One step back and one step forward on the IPO (initial public offering) for the Agricultural Bank of China. I’ve repeatedly tabbed this IPO as the indicator I’m watching to figure out the health of China’s stock market in particular and its financial system in...Faster growth and cheaper too–what's not to like in emerging market stocks?
The big picture, macro reasons for putting more emerging market stocks in your portfolio are compelling enough. But you don’t need to buy into the top down macro argument. The micro, stock-by-stock reasons are just as compelling. Put a developed economy stock up...Unemployment in China? Yes, if you're a college grad
Question: True or false? Workers’ pay is rising in China Answer: It depends on which workers. For blue collar manufacturing workers in China’s export industries, the answer is True. Foxconn, the subsidiary of Taiwan’s Hon Hai Precision that assembles Apple’s iPod,...Real estate sales fall by 70% in Beijing and Shanghai on China property tax fears
Shanghai has submitted a plan to begin China’s first property tax on residential real estate to the Beijing government for review. The plan is rumored to include a tax on people without residence permits and on those who haven’t filed an income tax return in three...Move over Charles Ponzi and Bernie Madoff–China is running history's largest financial scam
Maybe it isn’t precisely a Ponzi scheme but China’s banking policy sure comes close. And it sure isn’t monetary policy. China has made headlines by raising the reserve requirements for its banks repeatedly this year to a current high of 17%. The move has raised fears...Jim’s Daily Email Alerts:
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