ChartBrief #14 China Official PMI

1
ChartBrief #14 China Official PMI
China’s official (NBS or National Bureau of Statistics) PMIs for September were more or less in line with expectations and remained in expansionary territory.  By the numbers: Official manufacturing PMI unchanged at 50.4 (Caixin/Markit manufacturing PMI was 50.1 vs 50.0 previous) and the official non-manufacturing PMI was 53.7 vs 53.5 previous.  Overall mildly positive, or stable.Play Quizzes 4

Within China’s non-manufacturing PMI the services index actually fell -0.4 to 52.3; all the strength came from property (construction index up +3.7pts to 61.9).  Within the manufacturing PMI the large (SOE) enterprises were up +0.8 to 52.6, medium-0.7 to 48.2 and small -1.3 to 46.1.  So it is a case of stimulus driving the strength; supporting the property market and large SOEs.  The small manufacturers are still doing it tough and are likely in trouble due to soft exports, spare capacity, rising labor costs, and less access to credit (vs SOEs who are given ample credit in order to boost the economy).  The other interesting statistic is that 6/11 subindexes of the PMI were above 50, the last time they were higher was in March (7/11) at the time of the stimulus rumors and iron ore price spike.  So is this a case of the stimulus rumor starting to become fact?  Best guess is yes given the strength in construction and large SOEs.

Morningstar Investment Conference: Everything You Need To Know About Preferred Securities

Arena Investors Chilton Capital Management Schonfeld Strategic Advisors Robert Atchinson Phillip Gross favorite hedge fundsPreferred stock has been around for more than 150 years. One study suggests that the first shares of preferred stock were issued in 1836 by internal improvement companies in Maryland. However, some investors might not have given this asset class much thought until the government commandeered preferred shareholders' dividends in the government-sponsored enterprises Fannie Mae Read More

Bottom line: China’s PMIs basically reflect earlier announced stimulus being transmitted to an economy that still faces structural challenges.

[drizzle][/drizzle]

Updated on

Topdown Charts: "chart driven macro insights" Based in Queenstown, New Zealand, Topdown Charts brings you independent research and analysis on global macro themes and trends. Topdown Charts covers multiple economies, markets, and asset classes with a distinct chart-driven focus. We are not bound by technical or fundamental dogma, and instead look to leverage any relevant factor to capture the theme. As such, here you will find some posts that are purely technical strategy, some that just cover economics and data, and some posts that use multiple inputs to tell the story and identify the opportunities. Callum Thomas Head of Research Callum is the founder of Topdown Charts. He previously worked in investment strategy and asset allocation at AMP Capital in the Multi-Asset division. Callum has a passion for global macro investing and has developed strong research and analytical expertise across economies and asset classes. Callum's approach is to utilise a blend of factors to inform the macro view.
Previous article Winners and Losers in This Week’s Rate Hike Decision
Next article Professionals Dismayed by Fed Decision

No posts to display

1 COMMENT

  1. I currently get paid in the span of 6 thousand-8 thousand bucks monthly from working on the internet at home. For anyone prepared to do basic freelance task for 2h-5h daily at your home and get solid benefit for doing it… Then this golden opportunity is for you… FAVE.CO/2bocRGL

Comments are closed.