Today's headlines are doom/gloom on China growth. Yet up ahead we see sunshine peeking through those 中文 clouds.
As the world's top trading nation and second largest economy Chinese activity sets the pace for global growth and is an important barometer of the global economy. That's why news on Chinese growth makes headlines worldwide.
While China has many capitalist features make no mistake it is a party-run country. And for anyone who just woke from a 70-year coma that party is called the Communist Party.
China's Communists Party's has many tools to reflate its economy and it's starting to deploy them - massively. For example, Chinese equipment purchases are growing at a 30% annual rate presaging a revival in manufacturing.
Also China's M1 to M2 ratio is rebounding, a sign of improvements in global trade, commodity prices and industrial production.
While our Chinese "weather report" is not quite worry-free - auto sales are unusually soft and capex is still moderate - the overall turnaround in credit and other data suggest smooth sailing ahead.
Weekly Markets Update, Week-ending July 12, 2019
The S&P 500 was up 82bps even as the Dow Jones gained 1.54%, the Russell 2000 declined -34bps and the Nasdaq increased 1.01%.
As for US bonds, they were down -21bps.
Globally, the MSCI World Index increased 35bps and the Barclays Global Aggregate Bond Index decreased -22bps.
In June the Euro Stoxx 50 lost -85bps in local-currency (Euro) and -42bps in USD. Meanwhile, the Topix declined -1.02% in local-currency (Yen) and -45bps in USD.
