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.
By Max Magee
While the market was positive last week for the first time in six weeks, speculative segments continue to struggle, weighed on by economic concerns, and, for Chinese names especially, ongoing concerns about accounting irregularities.
Positive economic data has lit a fire under Chinese equities. Regardless of whether the data is legit or fabricated, accelerated price action for Chinese stocks makes now a good time for a review of the key Internet stocks operating in China.
Chinese Internet stocks combine two of the of the most popular stories for equities post-crisis:
Macquarie Private Wealth released its 2013 global outlook on Wednesday, predicting U.S. stocks would outperform Canadian stocks again this year and declaring the “resource price boom over.”
The S&P/TSX Composite index has lagged behind the S&P 500 two years in a row now. In 2012, the index rose 7.2%, but trailed the S&P 500′s much more impressive 16% climb. Macquarie expects the gap to continue in 2013 as resource prices hold steady this year.
Chinese export data over the weekend surprised investors and traders across the globe when it reflected a decline of 18.1% year-over-year (YoY) in February, missing analysts’ estimates of a 6.8% increase. China also reported a negative trade balance for February; the trade deficit was $22.98 billion while analysts had projected a $14.5 billion surplus. Following the release of the Chinese data, benchmark prices for iron ore fines 62% at the Tianjin port fell 8.3% to $104.70 per dry metric tonne, posting the second-biggest single-day drop.
Article written by Prieur du Plessis, editor of the Investment Postcards from Cape Town blog.Since the middle of May I am on record for being bullish on Chinese stocks. One of the top Chinese managers, Liu Tang, chairwoman of Atlantis Investment Management echoed my bullish view in an interview with Bloomberg on Monday, July 11.
Article written by Prieur du Plessis, editor of the Investment Postcards from Cape Town blog.China’s CFLP manufacturing PMI dropped to 50.9 in June from 52.0 in May. The PMI was in line with what I expected on the basis of the seasonal pattern and what the stock-to-orders ratios pointed to in the previous month’s PMI.
By Cliff Wachtel:
EURUSD bullish and bearish technical, fundamental drivers for both short and longer term, plus new signs of the big long term bearish threat to the pair - The Europeans themselves, plus a real-time trader positioning sample & links to details on key market drivers for spot forex and FXE, UUP and related ETF and related EURUSD derivatives traders & investors
Xiaofan Zhang submits: Chinese Internet stocks ended March on a positive note: On average, the 42 Chinese Internet stocks (Table 1) rose 0.7% in the month. At the segment level, Online Travel, Online Video, Online Games, and Online Advertising stocks had positive average performance, while E-Commerce stocks continued to struggle. Below is my detailed analysis of each segment:
Bull in the China Market submits: In April 2008, I recommended a portfolio of nine Chinese smallcap stocks (see “Bullish on Chinese Microcaps”). If you had invested an equal amount of money in each of these stocks, you would have realized a 39% gain during this period. In comparison, the S&P 500 declined 18% over the same time frame.