Thread by @Trinhnomics

Good morning 🌞- Asian PMI data showing a bounce this morning after a decline in Jan + Feb (see table); Korea 🇰🇷March exports (1st to report) contracted further to -8.2% YoY from -11.4% in Feb; Imports also -6.7% after double digits decline so Q1 2019 ugly. 🇯🇵Tankan Q1 ugly

So?

👉🏼Caixin PMI rose 50.8 from 49.9 in Feb. 3-month moving average chart below:

Q average Caixin manu PMI is 49.7 (mild contraction of manufacturing) & state is 51.9.

Manu PMIs are sticky at 50-ish level as gov' steps in to floor the bottom & weak global demand ceiled growth

Here is a comparison of China Caixin manufacturing PMI vs US vs Europe's. Notice how very small the business cycles are in China for the manufacturing sector. That survey sure doesn't move too far from 50 (since 2016, max =51.9 & min=48.3 on Jan 2019).

Meaning, growth floored🤗

Back to the future - after rallying 26.8% ytd, we're now in June 2018.

Meaning, if u're invested 100 end 2017, u're still down today on 1 April '19. That said, if u bought end 2019, good job! 🤗

Q: Will retail investors chase this & push it higher? @HAOHONG_CFA

@HAOHONG_CFA Drivers of stock rally: more buyers. How to finance? Debt! Margin debt rose to 14% in March to USD136bn/CNY 913bn - biggest gain since 2015. "Investors" borrowing to buy highest volatility stock market in the world! Foreigners buying too🤗

Q: Wut happened in 2015?

@HAOHONG_CFA

@HAOHONG_CFA Keynes: “Markets can remain irrational longer than you can remain solvent.”

If fundamentals deteriorate yet markets rally on hope, what’ll sustain the rally? More believers, well, until they don’t. Buyers tend trickle in slowly but dash to exit. High reward=high risk. True story

@HAOHONG_CFA FYI, big data week for the US:

1) Retail sales tonight
2) ISM
3) Durable goods order
4) Jobs (ADP & NFP)

Same chart smoothed (taking a 3-month moving average), which shows contraction by China & the EU in Q1 2019:

Eurozone manu PMI contracted further to 47.5 (3-month average is 49.1)😬
China bounced to 50.8 & 3-month average is 49.7 (contraction)
US manu ISM not yet out for March.

Germany manufacturing declined to 44.1 in March from 47.6 in Feb;

By details, it's awful - payroll numbers fell the 1st time in 3 yrs & new orders decline accelerated & price pressures fell.

Here's the bad news: NEW ORDERS POST STEEPEST DROP SINCE APRIL 2009 😬

🇩🇪

Here is the Eurozone: Steepest decline of manufacturing since late 2012.

3 biggest econs (Germany, France, & Italy 📉📉📉) while Greece, Ireland bounced back.

Here's the bad news: "forward-looking indicators show downside risks intensified & could deteriorate further in Q2" 🥶

And that bearish quote is not coming from @Trinhnomics but Markit (see highlighted):

a) Further deterioration in Q2 expected
b) New orders falling at rate not seen since 2012
c) Job losses in Germany & Italy 🥶
d) France contracting too
e) Australia & Spain infected & slowing 😬

Meanwhile, in #Brexit Land, manufacturing PMI is SOARING to 55.1, a 13-month high; stocks & finished goods rise; output, employment & new orders STRENGTHENED!

Perhaps an indication of stockpiling & prepping for Brexit so may have some payback but pretty 📈compared to Germany's