Tuesday , November 19 2019
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China Q3 GDP Growth Disappoints, Slides To New Record Low

Summary:
It's that time of the month again... when China drops all its heavy-hitting macro-economic data (goal-seeked or not - allegedly) with expectations for slowing industrial production and overall economic growth (but a bounce in retail sales). Recent aggregate macro data has been disappointing as China's credit impulse (despite every effort) has failed to inspire... Source: Bloomberg The other main figures we had before today were the two manufacturing PMI readings, one of which showed some clear improvement, and the other showed continued deceleration; and both exports and imports contracted, in a clear hit from the trade war. The 8.5% slide in imports was particularly worrying. Passenger car sales have slid for 14 months And of course, don't forget that consumer price inflation is

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It's that time of the month again... when China drops all its heavy-hitting macro-economic data (goal-seeked or not - allegedly) with expectations for slowing industrial production and overall economic growth (but a bounce in retail sales).

Recent aggregate macro data has been disappointing as China's credit impulse (despite every effort) has failed to inspire...

China Q3 GDP Growth Disappoints, Slides To New Record Low

Source: Bloomberg

The other main figures we had before today were the two manufacturing PMI readings, one of which showed some clear improvement, and the other showed continued deceleration; and both exports and imports contracted, in a clear hit from the trade war. The 8.5% slide in imports was particularly worrying. Passenger car sales have slid for 14 months

And of course, don't forget that consumer price inflation is roaring thanks to piggy-driven food-flation...

China Q3 GDP Growth Disappoints, Slides To New Record Low

Source: Bloomberg

The point being, no matter how 'bad' tonight's China data is, a broad-based RRR-cut stimulus package is not high on the CCP's agenda as Xi would prefer the social unrest in Hong Kong does not spread to the ruralities of the mainland as food-shortages spark chaos.

So, let's see just how good or bad things are...

  • China GDP YoY +6.0% YoY MISS (+6.2% prior, +6.1% exp)

  • China Industrial Production YoY +5.6% BEAT (+5.6% prior, +5.5% exp)

  • China Retail Sales YoY +7.8% MEET (+7.5% prior, +7.8% exp)

  • China Fixed Asset Investment YoY +5.4% MISS (+5.5% prior, +5.5% exp)

  • China Property Investment YoY +10.5% (+10.5% prior)

  • China Surveyed Jobless Rate 5.2% (5.2% prior)

Graphically...

China Q3 GDP Growth Disappoints, Slides To New Record Low

Source: Bloomberg

The Chinese goalseek-o-tron appears out-of-order tonight, when moments ago Beijing reported that China's Q3 GDP rose just 6.0% YoY, below the 6.1% consensus had expected - and the lowest since 'modern' records began 27 years ago in 1992, dipping below even the financial crisis low of 6.4%.

China Q3 GDP Growth Disappoints, Slides To New Record Low

Source: Bloomberg

The initial reaction in markets was unsurprising - US equity futures rallied! because bad news is good news, right...

China Q3 GDP Growth Disappoints, Slides To New Record Low

Perhaps the machines should glance at the inflation chart above before getting all hot and bothered.

Tyler Durden
Tyler Durden (a pseudonym) represents the idea that a return to truly efficient markets is a possibility and a necessity. After having experienced the inner workings of capitalism at various asset managers and advisors, Tyler believes that the current model is flawed and a deleveraging at every level of modern society is needed to reinspire the fundamental entrepreneurial spirit.

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