China under pressure again as is Europe

By Peter Boockvar - May 4th, 2010, 9:00AM

After being closed Monday, the Shanghai index, responding to the PBOC’s step over the weekend to further tighten policy, fell 1.2% to the lowest level since Sept ’09. The market is now down 13.5% ytd and is lower for the 11th of the past 13 trading days. Also impacting the action was the release of the Chinese private sector weighted manufacturing PMI which fell to the lowest since Oct ’09 and copper is falling to the lowest level since late Feb. I continue to talk about this weak Chinese market action because I continue believe it is the most important country in the world in terms of its economic influence on the fastest growing part of the world. China’s biggest trading partner, the Euro region, is taking it on the chin once again as people realize the EC/IMF help for Greece may not be enough. PIIGS debt are trading lower as are all stock markets in the area. As expected, the RBA hiked rates again to 4.5%, now up 150 bps off the low in Sept ’09.

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Category: MacroNotes.

Comments

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data, ability to repeat discredited memes, and lack of respect for scientific knowledge. Also, be sure to create straw men and argue against things I have neither said nor even implied. Any irrelevancies you can mention will also be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

3 Responses to “China under pressure again as is Europe”

First Solar Faces European Stimulus Concerns | ZachStocks Says:
May 4th, 2010 at 3:15 pm
[...] Also, there is the BP oil spill which may add to pressure for more “safe” energy sources. If oil drilling comes under tougher sanctions, we may see higher demand for solar energy as a result. Such a move would benefit the entire industry and with FSLR as one of the leaders, it could receive higher levels of new orders. Other Articles of Interest Lululemon Heads South Homebuilders – Too Far Too Fast? FT: Greet Contagion Fears Hit Europe Stocks Ritholtz: China Under Pressure Again as is Europe [...]
Market Talk » Blog Archive » Links 5/4/2010 Says:
May 4th, 2010 at 5:44 pm
[...] Recent weakness in China stock market doesn’t bode well, Peter Boockvar notes. Shanghai index currently sits at lowest level since last autumn, it’s down 11 of the past 13 [...]
perra Says:
May 5th, 2010 at 4:06 am
In Chinese business media, there is relatively little concern about April’s manufacturing PMI. The consensus seem to be that the markets are reacting to the Chinese government slamming the breaks on lending. Mark Faber predicted this back in February…

http://www.cnbc.com/id/35444726/Dr_Doom_China_Will_Drag_Down_US_Stocks_By_20

…and stated that he thought the Chinese market would bring down the US markets by around 20%.

IMHO, this seems like a healthy development. Reg. the manuf. PMI, it is still expansionary and not a major cause of concern.