Posts Tagged ‘China’
Chinese Inflation Turning Down – More Confirmation on Inflection Point
Overnight, China released inflation data for October, which came down as expected and declined meaningfully from the previous month. Chinese consumer inflation, which includes food and energy prices, rose 6.1% in September, and 5.5% in October. This data shouldn’t be a complete surprise because China is on a tightening campaign with higher interest rates, lower…
Read MoreWhen Will the Market Start to be Forward Looking – Early Signals from Asia?
The markets have been through a period of wicked volatility with a significant pullback almost to the point of entering a new bear market. Intraday the S&P 500 was down 20% from its high but closed above those levels and went up from there. From the market’s closing bottom of 1,099 the S&P had a…
Read MoreUS Industrials See No Evidence of Global Recession – Results from Caterpillar (CAT) and Parker Hannifin (PH) Hammer Home the Point!
Caterpillar (CAT) reported very strong earnings this morning, beating estimates quite handily. EPS of $1.71 compared to consensus of $1.57 (a 9% beat). As important, the company outlined an environment consistent with global growth persisting and a strong outlook for 2012. Caterpillar’s organic sales grew by 34% this quarter excluding the recent acquisition of Bucyrus.…
Read MoreUniqlo Launches Flagship in New York City – Prospects for the Brand and Fast Retailing (9983.JP)
Uniqlo is the main global brand produced and designed by Japanese parent company Fast Retailing (9983.JP). Uniqlo is an older brand with a domestic focus on market share in Japan. The company has done a great job of growing as a Japanese specialty retailer with its compartmentalized presentations and spartan, clean, and colorful styles. The…
Read MoreChina’s Golden Week Retail Sales Remain Strong – No Hard Landing
China’s Golden Week is one of two major 7-day national holidays in China. The two holidays are the Lunar New Year which begins sometime in January or February and Golden Week which starts in early October. The idea of a week long holiday is to provide an opportunity to take time off from work and…
Read MoreYum! Brands – Results Indicate Strong China Consumption Growth Continues
Yum! Brands (YUM) released results after the close of market yesterday. Yum is the world’s second largest quick service (fast food) restaurant after McDonald’s and operates the KFC, Taco Bell, Pizza Hut, Long John Silver, and A&W Restaurant franchises. Yum is an important company I follow because of the exceptionally strong gearing to China. This…
Read MoreChina PMI – No Evidence of a Hard Landing
China’s official PMI was released over the weekend (after financial markets closed on Friday) and the September data point came in slightly higher than last month and slightly higher than expected. The total manufacturing PMI index came in a 51.2 which is the strongest month of the past 4-months. As important as the slight uptick,…
Read MoreChina Hard Landing Fears – The Reality and The Preposterous
Slowdown fears in the market have shifted to China. The past two days has seen the start of a shift in sentiment with China exposures viewed more as risk than as opportunity. There is clearly some slowing in China, and there should be, because the government has been trying to slow the economy to help…
Read MoreEM Stock Markets – Destabilized by Currency Sell-offs and Capital Outflows
Developed market equities are attempting to stabilize based on additional talks from Eurozone leaders who are meeting with the IMF and reported to be discussing items such as expanding the size of the EFSF, creating a TARP-EU, and recapitalizing more of the European financials. Developed market investors are attempting to look ahead during scary times.…
Read MoreNike’s Strong Results Indicative of Solid Global Consumption
Nike (NKE) reported an excellent set of results after the close last night. Headline earnings were $1.36 vs a street consensus of $1.21 (12.4% beat). I listened to the Nike earnings conference call and was really impressed with the strong business trends relative to the obvious dislocations we are seeing in the market and talk…
Read MoreChitaly Starts to Mambo Italiano – China in Talks To Buy Italian Sovereign Debt?
I mentioned this possibility over a month ago on August 5th, in the story “Chitaly – China to Purchase Italian Sovereign Debt?” Headlines just hit that Italy is in talks with China to directly buy Italian bonds according to the FT. This headline caused an immediate lift to depressed markets which is quickly getting faded. I believe this may…
Read MoreIt’s Time to Buy in Hong Kong
After a brutal correction in both prices and valuations it is time to get long(er) China geared Hong Kong listed equities. I believe the timing is right because the single largest risk factor, inflationary pressure, is in the process of peaking, and is likely to abate moving forward. China growth persists at a 9% clip…
Read MoreChina Rate Hike Cycle Over?
Markets are on edge. This type of volatility is wrenching. It weighs on professional investors, it interjects more emotion into the investment process, while elevating stress, and causing people to lose sleep. The above is natural as money is made or lost at an outsized pace in hourly timeframes. This phenomena is measured by the VIX…
Read MoreChina Inflation – Non-News News
The Chinese CPI is not an apples-to-apples measure relative to the CPI (consumer price index) that is reported here in the US. Some are attributing the overnight leg-down in the S&P futures (down another 24 or 2.25% at 11:00pm) to the fact that Chinese inflation came in at 6.5% when the consensus was 6.4%. Crackerjack…
Read MoreChitaly – China to purchase Italian Sovereign Debt?
Crackerjack continues to hold the view, that what transpired in the markets is a crisis of confidence, more so than an actual crisis. There is a big and important difference. During the real-deal 2008-2009 economic crisis you had actual insolvent institutions as the value of mortgage securities declined when the US housing market imploded. The sovereign…
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