To understand why the retail sector will continue to be such an investment minefield consider just two phrases: Black Friday and Cyber Monday.
The latter, the mock tradition of buying stuff online when the boss isn’t watching on the Monday after Thanksgiving, is emblematic of the forces challenging a retail industry much of which was built for a U.S-centered cars, parking lots and box store paradigm which makes less and less sense every day.
It was another day of ugly overnight macro data, all of it ouf of China, with industrial production (8.6%, Exp. 9.5%, Last 9.7%), retail sales (11.8%, Exp. 13.5%, Last 13.1%) and fixed asset investment (17.9% YTD vs 19.4% expected) all missing badly and confirming that in a world of deleveraging, the Chinese economy will continue to sputter.
BEIJING (Reuters) - Chinese industrial production weakened sharply in April as investment slowed to its lowest level in nearly a decade, showing an economy that is surprisingly vulnerable to a global slowdown and a credit crunch at home. Industrial production rose by 9.3 percent in April, the lowest level since May 2009, while retail sales surprised the market by slowing to a 14.1 percent rise, the lowest level in 14 months. Fixed asset investment rose by 20.2 in the first four months of the year, the slowest level since December 2002. "It's obviously much weaker than anyone had expected. 9.
he economic data due out in what for many will be a holiday-shortened week is unlikely to change macro-economic picture: • Even though the US economy is strengthening after a dismal first quarter, the peak in the Fed’s balance sheet is still the better part of six months out, and the first rate hike is more than a year away. • China, the world’s second largest economy, has slowed, though the focus is just as much on the financial sector, where the yuan has weakened and financial conditions have tightened.
By Willem Thorbecke
Today, we're fortunate to have Willem Thorbecke, Senior Research Fellow at Asian Development Bank Institute and a Consulting Fellow at Japan's Research Institute of Economy, Trade and Industry, as a guest contributor.
Asia's role in the propagation of the global recession has been a subject of study, but relatively little attention has been devoted to the interaction of exchange rates a