CHINA'S INDUSTRIAL PROFITS FELL TO THE LOWEST SINCE THE COVID CRISIS
Industrial profits at large Chinese companies PLUMMETED 27.1% year-over-year in September, the most since the COVID CRISIS. This is after they FELL 17.8% in August. China is in deep economic trouble. Source: Global Markets Investor, Bloomberg
😱 The shocking chart of the day: CHINESE DEBT SIZE IS ABSOLUTELY MIND-BLOWING😱
China's debt-to-GDP ratio hit a MASSIVE 366% in Q1 2024, a new record. Since 2008, the ratio has more than DOUBLED. Breakdown: Non-Financial Corporates: 171% Government: 86% Households: 64% Financial Corporates: 45% Even with this huge debt, China cannot achieve a 5% GDP growth target. How much additional leverage do they need to boost growth? And at what cost? Source: Global Markets Investor, IIF, Wells Fargo
Sometimes things come at you fast: MSCI China now outperforming MSCI USA year to date
Source: Louis-Vincent Gave, Gavekal
😱Yesterday's China equity market performance in one chart !!!
Below is a heat map of today's returns of the 2,230 stocks which belong to the Shanghai Composite index... Not a single one was down (the worst one was actually flat). And 10 stocks gained more than 20%... Source: Oktay Kavrak, CFA
BCA's Marko Papic (@Geo_papic) sees Chinese monetary & fiscal stimulus as a "fairly big deal": "This is Beijing’s 'Whatever It Takes' moment.
Effectively, Beijing has reached a point where the policy focus shifts from guarding against moral hazard to guarding against political risks." He bets, that we are at the start of a major rotation out of US assets. Source: HolgerZ, Bloomberg
China shorts are "ALL-IN".
Even more than at *the* Bottom. Source: Macro charts
Xi's economic adrenaline shot is only buying China a little time
Source: Bloomberg
