China Manufacturing PMI Misses 6th Month In A Row As Home Sales Collapse 47% YoY

Tyler Durden's picture

For the 6th month in a row, China HSBC Manufacturing PMI missed expectations. With a 48.1 print for April (vs 48.3 flash) this is a very modest rise from March's 48.0 but is the 4th month in a row of contraction for the broader-based HSBC-version of the PMI (as opposed to the official more-SOE-biased version which remains in modest expansion). This is the longest streak of contraction since Oct 2012 (and the 3rd consecutive month of new order contraction) as employment drops for the 6th month in a row. Most worrying new export orders dropped further showing no signs of a US-driven pick-up post-weather. As if that was not enough to upset the 'recovery is around the corner' crew, home sales in China in the most recent (most frenetic typically) period, collapsed 47% year-over-year (and a stunning 65% in tier-2 cities). But apart from that - everything's great in the newly appointed largest economy on earth...


The gap between the official and HSBC/Markit PMI is at almost its widest in 2 years...


with the 6th miss in a row and 4th month of contraction...


And as Bloomberg reports, Sales of 236,000 sq. meters in 54 cities monitored by Centaline shows 47% drop vs same period in 2012, 19% decline vs 2011, China Business News reports, citing Centaline Shenzhen.

  • 1st-tier cities sales falls 40% y/y
  • 2nd-tier cities sales drops 65% y/y
  • 3rd-tier and 4th-tier cities sales declines 32% y/y
  • • Mkt sentiment “not optimistic;” developers prioritizing on sales volume due to cash flow pressure, the report cites

Perhaps HSBC/Markit sums it up best:

"These indicate that the manufacturing sector, and the broader economy as a whole, continues to lose momentum."

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LetThemEatRand's picture

I'm just glad there are no derivatives associated with these events.  Better send some planes and ships and shit.  Somewhere.  How's Eastern Europe in the Spring?

X_mloclaM's picture

ban contracting?

versus simply not bailing em out if they fail?

nice false choice. rofl, must be another Dodd Frank luvr like LR

kliguy38's picture

Ignore these numbers and just buy NFLX tomorrow.

Carpenter1's picture

Ho-Ri-Fuk! No Mo house build for yu!!

TruthInSunshine's picture

Global contagion of unprecedented (and disproportionately unsecured) leverage spreading like a pollen storm from east to west and back again, blanketing all four corners.

Also, the fish rots from the head.

I wouldn't be surprised, let alone shocked, if China's real GDP as measures with any metric of credibility, was shrinking by 4% to 8% annually, at this point, with a major credit/debt collapse now imminent.

eXMachina's picture

Tends to be warmer than the nuclear winter!

TideFighter's picture

SO, why don't they print the BLS Unemployment rate at zero-point-zero? Zero is closer to the actual unemployment rate compared to the true rate. Just make everything zero, while were at it. We can start at the top. Obama is a zero. Justice All


The answer to all questions is zero. 

Cognitive Dissonance's picture

Nothing a little lot of QE won't fix delay.


G.O.O.D's picture

47% is freakin huge! It is all over but the crying and gnashing of teeth.

DirkDiggler11's picture

Bullish as well Rand ! Good for an easy +100 points opening on the Dow tomorrow AM before the algos start feeding off each other.

Seize Mars's picture

 I would argue that Chinese economic numbers are slightly less reliable than American ones, just because the US ones have sometimes ways to cross-check them.

NoDebt's picture

"slightly less reliable"

Some might mistake that for sarcasm.  But I don't.  And I think (right so) you didn't intend it as such.

I think that's exactly the right way to describe it.  They're all lying, it's just a matter of degree.

Carpenter1's picture

Right, so it's even worse. No chance China put out worser numbers than the truth.

Aknownymouse's picture

"We expect the VIX to be in single digits based on this news. We are not worried one bit at that temporary slowdown over the past 6 months in China. This is a great time for investors to selectively pick great names in the US and emerging markets. With all the cash on the sidelines and the FED forever supporting this market we raise our year end equities target to 3,500 on the S&P and to 15,000 by 2015. The markets are selling at a deep discount compared to average equity valuation PE of 7500 in the comparable period of 1999 to 2001. My best picks are Twitter, Facebook and Amazon. We have a strong buy on all 3 value picks"

Your generic CNBC guest.

maskone909's picture

You nailed it!! Here is your $20 bucks and coffee mug.

Never One Roach's picture

Time for another few $$Trillion$$ to be printed.

Atomizer's picture

Since Baltic index is down, new container housing may become the next greeny bubble. 

mademesmile's picture

Are sales down because we slowed the purchase of overseas crap? I'm so sick off seeing made in China on everything. General rant, but have you noticed how craftsman stopped engraving their name on the hand tools? Often the little sticker wears off before the thing breaks so you can't turn it in for an exchange. There is no quality in any namebrand anymore.

post turtle saver's picture

war in Europe and the initial symptoms of Asian Flu... bullish, BTFD

q99x2's picture

Time to prepare the bunker.

AdvancingTime's picture

This bodes poorly for China and should be considered more proof of big troubles ahead. China has entered a great credit trap and is awash in overcapacity and debt. Much of the recent growth in China after 2008 came from a massive 6.6 trillion dollar stimulus program that expanded credit and poured massive amounts of money into the system. This money encouraged expansion and construction with little regard as to real demand or need.

After several years of growing debt concern is rising the whole unstable pyramid is about to come crashing down bringing China and possibly the global economy with it. This is not just about writing off a few bad loans. The shadow banking sector is so large that concerns exist about contagion and a domino series of defaults that might rack the economy as savers lose money. More on this subject in the article below.

Fred123's picture

When a Chinese loses money they get very, very angry. Mobs in the street by Christmas......

TruthInSunshine's picture

There's a reason that more hundred millionaires & billionaires (Cronies) have fled from China for other refuge locations than from any other nation over the last two years, and it's not related to pure demographics.

China is an absolute septic cesspool of corruption even by the lowly relative standards of other nations, and the impending economic bust will threaten the elite in ways few can imagine or think possible.

AdvancingTime's picture

When money shifts out of China and just as recently Japan it helps to bolster markets in America, the UK, Germany, and other countries. I wonder how much of the strength in these markets are coming from these cross border cash flows?

SoDamnMad's picture

Correct. The Chinese beat out the Ukrainian billionaires by a kilometer.

TammanyBrawl's picture

New acronym time;
BTFC- Buy the fucking crash

HaroldWang's picture

US market opens in less than 8 hours and /ES down 2. That's all. Nothing can bring this market dow. Nothing.

MaxThrust's picture

The interesting thing here is "What will be the Trigger" that causes this house of cards to coming tumbling down.

It seems to have a momentum all of its own even though most players know its all built on shifting sand.

I scratch my head and wonder how anyone could have any money in the stock markets of the world and feel safe about it that they can get out when things turn sour.


Bernoulli's picture

I wonder, too. But they are not feeling safe, the people in the stock market are drugged. There is not even any music playing anymore. Just lots of CNBC-MC's from different stages going like "put your hands up in the air!! Party like you just don't care!! Keep on dancing, b****es!" Several of the big guys not there anymore, many heading for the exits (trying not to be seen), but the people don't pay attention just keep listening to the voices of the MC's...

Until someone will shout: "Hey guys, there is no more music playing!!!"


Angry Plant's picture

Market forces will be the trigger. Once housing prices hit the point where buyers can no longer afford them the market runs on speculation as people buy houses as a investment and not to be use them to live in.Once that speculative phase runs its course it a rush to exit by the speculators that brings the whole thing down.

blackbeardz's picture

if only app. 30% of all trades are made by individual traders then who really is holding this market up? Algos. hedgefunnys, institutionalized(need to be), da FED -the first to break in march were the momo ones. The other shoe will drop but will hold on the longest too. Like a pig slowly rolling over in the mud, soon even the lipstick will ware off and all will wake-up at once screaming at what they brought home.