The Bankwatch

Tracking the consumer evolution of financial services

While European Markets Slip Ahead Of The ECB, China has the answer

China has a simple formula for addressing market concerns when the market goes the wrong way. Simply change the message and viola!

See the bold quote below (bolding mine).

… and yes we have land in Florida to sell to you.

by CMC Marketsuk.investing.comJuly 16, 2020 09:34 AM

While US markets finished higher for the fourth day in a row, markets in Asia have come under pressure after the latest economic data out of China painted a rather mixed picture of the economic outlook in the world’s second biggest economy.

China Q2 GDP showed a 11.5% rebound, more than reversing the -10% fall in output seen in Q1, suggesting a nice v-shaped recovery in economic activity. The annualised number recovered to 3.2% from -6.8%.

If you had any doubts about the accuracy of China’s GDP numbers before this morning’s announcement, these figures only serve to reinforce that scepticism, as they appear to completely diverge from most of the data that has come out of China since April. In terms of the trade data, both imports and exports have been weak, while retail sales have also struggled.

Retail sales have declined in every month, by -7.5%, -2.8% and -1.8% in June, and with the Chinese consumer now making up around half of China’s economic output, I would suggest these numbers in no way reflect the real picture regarding China’s economy at this moment.

Written by Colin Henderson

July 16, 2020 at 07:48

Posted in Uncategorized

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