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China PMI Signals First Contraction In 6 Months; Drops Most Since May

Tyler Durden's picture


With every component of HSBC's China Manufacturing PMI either dropping or showong slower growth, it is hardly a surprise that the much-watched survey of economic strength dipped into contractionary territory. At 49.6 this is the lowest since July 2013 and dropped month-over-month by the most since May 2013. HSBC argues this is "domestic demand cooling" but new export orders tumbled at an accelerating pace as did employment. Of course, the silver lining is that because the prices components did not show acceleration then the PBOC has room to 'stimulate' to avoid repeating growth deceleration but that appears - despite today's further CNY 120 billion reverse repo - to not be the plan for the PBOC for now (given the 20-plus percent YoY gains in house prices). S&P futures fell 6 points on the news, AUDJPY is turmoiling, and Treasuries rallied 1bps.



The employment sub-index dropped near 4 year lows...


The result... AUDJPY is turmoiling and dragging US equit futures with it...


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Wed, 01/22/2014 - 22:08 | Link to Comment yrbmegr
yrbmegr's picture

Time for a stimulus war.

Wed, 01/22/2014 - 22:10 | Link to Comment Obchelli
Obchelli's picture

Chines PMI just crashed below 50. 49.5 against 50.6 expectations... Futures which where masterfully floated up 4 points in adavnce only erased gains. With Satanic Fed at helm won't be surprised to see futures up by 10 in the morning.. And propaganda machine somehow presenting this as super bullish news for equity market

Wed, 01/22/2014 - 22:14 | Link to Comment flacon
flacon's picture

I was watching a youtube video of underwater explosions with the ES and NQ futures up on the screen. I had to pause the exciting video for a while and crack open a beer as I watched the RED bars exapnd downwards. 

Wed, 01/22/2014 - 22:28 | Link to Comment Grande Tetons
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I went to the store with my son to buy him some Jello. When we got back we found our long Aussie behind the woodshed battered and bruised.  

Wed, 01/22/2014 - 22:37 | Link to Comment flacon
flacon's picture

Did you know that chinese workstations have RED candles for UP and GREEN for down (that's why some workstaions allow you to switch red/green)? RED = Lucky, so if we turn our monitors upsidedown then this was a GREEN move up. 

Wed, 01/22/2014 - 22:39 | Link to Comment Grande Tetons
Grande Tetons's picture

Flacon, lol..thanks....I always wondered how to describe the expression small comfort to a non native english speaker. 

Wed, 01/22/2014 - 22:47 | Link to Comment flacon
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Wed, 01/22/2014 - 23:25 | Link to Comment flacon
flacon's picture

Nasdaq futures are burning up.


Here is SPX500 live:



Thu, 01/23/2014 - 00:16 | Link to Comment Obchelli
Obchelli's picture

This will be all misteriousely fixed by morning. Up 6-8 points on f**g nothing as usual...

Wed, 01/22/2014 - 22:18 | Link to Comment gsh1976
gsh1976's picture

You just read my mind.  It is amazing how many times the futures rally on no news in advance of the release of bad news.  It happens almost enough to make me think the futures are being managed in some way but I know the Fed and the money center banks would never do such a thing.


Thu, 01/23/2014 - 00:20 | Link to Comment Obchelli
Obchelli's picture

Same happened before "all important" NFP report. Dow futures where up 80 and on horrible news of just 70K jobs added where down but still up 10. In fare market Dow would be down 400 points from overbloated level it enjoys now... How long this BS will go on? Simply sick of it and all this Analysts without any conscience left telling us how great growth in Global economy is? And what is even more concerning that market moves "confirm" what this idiots are telling us... Man how I want to see market prove all those IDIOTs wrong

Wed, 01/22/2014 - 22:21 | Link to Comment gsh1976
gsh1976's picture

Duplicate post but the amount of manipulation has gotten so absurd that nothing would surprise me.  If I found out heavy hitter such as JPM, GS, BAC, WFC, etc. had daily conference calls about the direction of the markets I would not be surprised.  Actually I would be more surprised if I was to find out from a verifiable source that such calls do not occur.

Wed, 01/22/2014 - 22:09 | Link to Comment poseidon
poseidon's picture

Oh crud - I guess this means another 20 pt rally for SPX tomorrow...

Wed, 01/22/2014 - 22:14 | Link to Comment Hindenburg...Oh Man
Hindenburg...Oh Man's picture

I certaintly hope that this doesn't dampen the usual overnight melt up of NASDAQ futures!!! oh dear, we need a new 14 year high at the open again. In any case, if it isn't elevated to the usual 0.30 percent, I'm sure that the index will work its way up in any case. BTATFH. 

Wed, 01/22/2014 - 22:28 | Link to Comment NoDebt
NoDebt's picture

That's the spirit!

Thu, 01/23/2014 - 00:13 | Link to Comment Wait What
Wait What's picture

headline for the overnight rally: NFLX beats estimates!

Page 6, placed under the dog being potty trained: Chinese PMI signals contraction... but fuels rumors of PBOC stimulus!


this bubble is going to make the DotCom bubble look like the beautiful rolling hills of Ireland.

Bernanke and Yellen are going to look at Benjamin Strong the way Wal-Mart looks at your local hardware store

Wed, 01/22/2014 - 22:20 | Link to Comment joego1
joego1's picture

Hmmm, seems to match Baltic shipping index and the generally broke nature of US consumers.

Wed, 01/22/2014 - 22:28 | Link to Comment NoDebt
NoDebt's picture

It's a good thing the real economy (if there is such a thing) has nothing to do with asset prices any more.  I'm sure you agree.

Wed, 01/22/2014 - 22:25 | Link to Comment Never One Roach
Never One Roach's picture

The Chinese are sneaking all their money out of their country according to ZH and even some Bloomberg articles. It's no surprise their economy is shrinking.

Wed, 01/22/2014 - 22:54 | Link to Comment max2205
max2205's picture

Nobody bought their crap for Christmas...too fucking bad

Wed, 01/22/2014 - 23:13 | Link to Comment iLiquid
iLiquid's picture


Thu, 01/23/2014 - 01:40 | Link to Comment starman
starman's picture

Tic toc tic toc

Thu, 01/23/2014 - 03:07 | Link to Comment praps
praps's picture

Baltic Dry tumble continues



Thu, 01/23/2014 - 04:13 | Link to Comment disabledvet
disabledvet's picture

I think the energy complex can hold out until February...but we'll see. Massive channel stuff of ICE vehicles followed on by a flood of imports? Clothing of top notch quality "to the rafters." Laptops for fifty bucks. Ummm. Four wheelers for five hundred...with a warranty. and "mountains of coffee, sugar, wheat and soybeans." we'll see how Chinese pork and chicken prices do. Canada is a large food producer as well actually. ten dollar French Wines...8 buck Italian Reds. about the only thing I don't see getting taken out here are rocket engines. clearly Japan will be all electric drive systems by next year. pipeline business, trains, coal and "steel reinforced concrete per Government contract." no one will be driving much but every bridge is completely rebuilt and every river bigger than an estuary becomes a hydroelectric plant. "and that only takes half the money." long concrete truck operators. oh, and I did read that Lockheed airship can carry 500 tons. that 25 tractor trailer loads.

Sat, 01/25/2014 - 05:47 | Link to Comment shawnmike
shawnmike's picture

Meanwhile the controlled sell-off in US equities is just that, completely controlled, and ready for the late day ramp. All while they go mad for bonds. Whatever, don't think anyone's jumping from windows on Wall Street just yet

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