China PMI

The China PMI data is out, unsurprisingly, given at least 2 major cities are in partial lockdown, it looks bad, although equally, “looks bad” is similar to most of my commentary on the longer run mix of macro data for the past half a decade or so.

Today’s print is below, dropping into contractionary territory (i.e., below 50)…


…with the other Caixin PMI indicator shared below for comparison.


That longer run data is indeed consistent with an economy that is slowing, to what looks like stall speed (at least, prior to the pandemic).


“Stall speed”, and fears of a property market correction is why the listed property developers have share price trajectories that look like the below.

Still, one should note that stimulus associated with the pandemic (and the PBOC strongly suggesting that more stimulus/easing-of-previously-restrictive-policy-around-leverage-and-propery) has made the very recent mix of general macro data improve, and notably so, relative to the the prior declining trend.

However, iron ore at $150 remains unsustainable, to me.

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