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Happy Monday! Day #1 w/o phones - feeling liberated from the temptation to check the mobile screens (but my buddy says it's not total digitox as I got work monitors - 4 of them). Asia:
a) China industrial profits softened in June t- -3.1%YoY from +1.1% & that means ytd worse 👇🏻
a) China industrial profits softened in June t- -3.1%YoY from +1.1% & that means ytd worse 👇🏻
Black line shows -2.4% YoY ytd (so profits in H1) while in purple line what it'd be if we take the level & calculate, which is -11.9% for H1 2019. Two things to note:
a) No matter what is the magnitude, both show a contraction of industrial profits in H1
b) But also stabilization
a) No matter what is the magnitude, both show a contraction of industrial profits in H1
b) But also stabilization
Despite June rebound of IP & retail sales & policy support filtering through to stabilize industrial profits (tax breaks etc), profits worsened, albeit marginally. Let's look at details by sector in H1 2019:
a) Petroleum process WORST -56% 🥶
b) Ferrous metals mining BEST+212% 👏🏻
a) Petroleum process WORST -56% 🥶
b) Ferrous metals mining BEST+212% 👏🏻
Worst sectors in H1:
a) Petroleum processing -56%(worsening)🥶
b)Other mining -44% (improving)
c) Non ferrous metals -38(improving)
d) Chemical fibers -25% (worsening)🥶
e) Metal products -15 ((worsening)🥶
f) Textile -26% (some stabilization) 🥶
a) Petroleum processing -56%(worsening)🥶
b)Other mining -44% (improving)
c) Non ferrous metals -38(improving)
d) Chemical fibers -25% (worsening)🥶
e) Metal products -15 ((worsening)🥶
f) Textile -26% (some stabilization) 🥶
Best sectors in H1:
a) Ferrous metals mining +212%🤗
b) Tobacco +28% (stressed people smoke?)🚬
c) Petro extraction +16%🤗
d) Electricity +10% (worsening) 😬
e) Beverage +9%(worsening)😬
f) Waste management +6% (worsening)😬
g) Food +2% (worsening)😬
h) Meds +1% (worsening)😬
a) Ferrous metals mining +212%🤗
b) Tobacco +28% (stressed people smoke?)🚬
c) Petro extraction +16%🤗
d) Electricity +10% (worsening) 😬
e) Beverage +9%(worsening)😬
f) Waste management +6% (worsening)😬
g) Food +2% (worsening)😬
h) Meds +1% (worsening)😬
Bottom line regarding industrial profits in H1:
a) Policy support is working to help stabilize some downstream sectors & that has both domestic & external implications (for example Australia doing well for exporting)
b) Headwinds strong for upstream & H2 not looking bright😬
a) Policy support is working to help stabilize some downstream sectors & that has both domestic & external implications (for example Australia doing well for exporting)
b) Headwinds strong for upstream & H2 not looking bright😬
Note that the strengths are SOFTENING (even essentials like food & medicine) & the only respite is that the SHARP CONTRACTION is STABILIZING so: China easing so far is putting is FLOOR on growth & not enough to engineer a V-shaped recovery & has implications REGIONALLY & GLOBALLY
That was H1 2019, we're almost the end of July & & this week we have many key macro events:
a) China PMIs for July (what we know about developed markets is that manufacturing is very bad in Germany & weaker in the US);
b) Fed meeting & markets PRAYING for cuts to soften the USD.
a) China PMIs for July (what we know about developed markets is that manufacturing is very bad in Germany & weaker in the US);
b) Fed meeting & markets PRAYING for cuts to soften the USD.
Eon calendar 👇🏻:
a) Today we had Japan retail sales that softened & VN data
b) BOJ tom, saving whatever ammo is left for later (40% JGBs ownership); Also US PCE core &Pending homes, Confidence & ADP
c) Wednesday is China data, Korea IP, Australia CPI & at 2am 1 Aug in Asia is Fed
a) Today we had Japan retail sales that softened & VN data
b) BOJ tom, saving whatever ammo is left for later (40% JGBs ownership); Also US PCE core &Pending homes, Confidence & ADP
c) Wednesday is China data, Korea IP, Australia CPI & at 2am 1 Aug in Asia is Fed
