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Chinese Stocks Tumble As Labor Market Starts To Crack

Tyler Durden's picture




 

While the rest of the world attempts to convince themselves that a Chinese stock market bubble and bust is at worst irrelevant, CapitalEconomics notes, evidence that the labor market is coming off the boil arguably matters more to China’s economy. Chinese stocks futures are down 2% in today's pre-open after yesterday's whipsaw action as 'exit plans' for the stabilization were discussed (dumping stocks) and then denied (surging stocks) shows just how fragile (and quickly and entirely addicted to China's new 'measures' investors have become); but as BofAML warned earlier, selling pressure will likely remain relentless. Now that the spell is broken, we expect that many holders may want to sell to the forced buyers in the market.

So not fear there will be plenty of liquidity...

  • *PBOC TO MAINTAIN LIQUIDITY AT MODERATE LEVEL: FINANCIAL NEWS
  • *PBOC TO INJECT 35B YUAN WITH 7-DAY REVERSE REPOS: TRADER

While the market may need more than just moderate amounts. As while yesterday's stability bounce helped,. futures are pointing lower as we open tonighht...

  • *CHINA'S CSI 300 STOCK-INDEX FUTURES FALL 2.0%
  • *CHINA SHANGHAI COMPOSITE SET TO OPEN DOWN 1.3% TO 3,939.90

 

The real economy (goalseeked headline data aside) appears to be showing further cracks... (via CapitalEconomics)

The equity market has received all the attention recently but evidence that the labour market is coming off the boil arguably matters more to China’s economy. There was a big fall in the ratio of job openings to job seekers in Q2 and slightly fewer new jobs were created in the first half of 2015 than a year before.

 

 

None of this is evidence of major stress and other indicators remain upbeat – for example, migrant wages are still rising at near 10% y/y. But the leadership is aware that economic changes are often only reflected in labour markets with a lag and it is already responding. Alongside broad policy easing, the government has introduced tax breaks for migrants setting up companies, cheap loans for start-ups, a reduction in employers’ social insurance contributions, and tax incentives and subsidies for some firms hiring workers.

*  *  *

Finally we have Goldman sounding the alarm for iron ore...

*IRON ORE SEEN DROPPING EVERY QUARTER THRU 2Q 2016, GOLDMAN SAYS

 

 

Prices seen at $49/ton in Q3 2015, $48 in Q4, $46 in Q1 2016 and $44 in Q2 2016, bank says in report.

 

“We expect seaborne supply to increase sequentially over the next two quarters and to gradually overwhelm the weak demand from Chinese steel mills,” bank says

 

While housing starts in China bounced back and infrastructure has overtaken property as largest end-market for steel, improvement during 2H 2015 may not be strong enough to support iron ore prices, Goldman says

Not great news for Australia.

 

 

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Mon, 07/20/2015 - 21:24 | 6335189 nmewn
nmewn's picture

Short sellers again.

Run them over with tanks!

Mon, 07/20/2015 - 21:32 | 6335219 Dead Canary
Dead Canary's picture

Ah am a-feared!

Mon, 07/20/2015 - 21:33 | 6335229 ZippyBananaPants
ZippyBananaPants's picture

this is werry werry bad, sum ting wong

Mon, 07/20/2015 - 21:35 | 6335236 ZippyBananaPants
ZippyBananaPants's picture

"you can blindfold them with dental floss"

Tue, 07/21/2015 - 03:08 | 6336014 SmokinMonkey
SmokinMonkey's picture

Can I use barbed wire instead???

Mon, 07/20/2015 - 21:36 | 6335245 g speed
g speed's picture

Any look at iron and coal in china deserves a sideways look at the Baltic Dry--Its global after all don't ya know--with China big in shipping. 

Then there's the lower highs and lower lows of the Barnam and Baileys Greater Equity Show ---

And immigrants getting a leg up? Thats gotta go over big with the locals---

all and all its a very bullish picture--China is such a world supper hero -I just love um-----gag---not

Mon, 07/20/2015 - 22:14 | 6335384 CHC
CHC's picture

China has a massive undertaking in trying to have enough jobs for the millions of young people that enter the work force each month.  What they should do is what the U.S. does - NOT A FUCKING THING.

Mon, 07/20/2015 - 22:16 | 6335386 Make_Mine_A_Double
Make_Mine_A_Double's picture

40' high cube box rates from HKG to LAX will be sub $1000 by next month.

And this is getting towards peak season.

Fugly and getting worse by the day.

Mon, 07/20/2015 - 22:34 | 6335449 Fukushima Fricassee
Fukushima Fricassee's picture

At least Xi is not a homosexual. I mean how confused is america with someone at the helm who has a "wife" who has a bigger dick than he does? They are both communist shits so I will take the one who at least knows where the  hell his dick goes.

Tue, 07/21/2015 - 06:05 | 6336149 biggestbrother
biggestbrother's picture

Obama 

TICKS

obama/romneycare

gay marriage

Iran nuclear deal (actually this was Kerry but he didnt get teh kudos)

 

CROSSES

Not reigning in Wall street

Everything to do with the environment

 

Could have been a LOT worse.

Mon, 07/20/2015 - 22:55 | 6335567 Handful of Dust
Handful of Dust's picture

Honestly, I'm not worried a bit. Seeing how the Fed totally manipulated the USA stawk market to astronomical highs now, China will do it bigger and better with a Bigger Stawk Market Bubble. Just give them a little time; the Fed didn't do it overnight either. Look at WFC, JPM, GOOG, even the shit stawk NFLX all hitting 52 week highs in the last day or two.

 

... and do not tell me, "it's a recovering economy" either!

 

 

Mon, 07/20/2015 - 23:29 | 6335675 spencer
spencer's picture

I call it BS. CSI300 is not tumbling - far from it. Maybe the futures base is negative, but nothing is really happening there:

 

 

[url=http://finance.yahoo.com/echarts?s=000300.SS+Interactive#{%22showArea%22:false,%22showLine%22:false,%22showCandle%22:true,%22showBollinger%22:true,%22showMfi%22:true,%22showMacd%22:true,%22showRsi%22:true,%22lineType%22:%22candle%22,%22range%22:%225d%22,%22allowChartStacking%22:true}]CSI300[/url]

 

 

Tue, 07/21/2015 - 00:45 | 6335837 laomei
laomei's picture

Oops, looks like it's up again. Look, Tyler #8, i get it, you have a thing about china and think you know what the fuck you're talking about... but sadly, you just dont have any fucking cue.  and when the market isnt doing what you want it to, or having the impact you have been taught to believe it should based on the US system... you just start making shit up.  just stop already, you are embarassing yourself.

Tue, 07/21/2015 - 04:13 | 6336076 Dindu Nuffins
Dindu Nuffins's picture

Weren't you cheerleading 5000 and 6000 a month ago? MSCI a sure thing? China ready to take center stage?

I suppose 0.6% today is your consolation prize, like lifetime supply of turtle wax. You win, enjoy!

Tue, 07/21/2015 - 09:55 | 6336717 laomei
laomei's picture

I was saying it wouldn't be shocking, and it hit 5k.  

Sat, 07/25/2015 - 22:12 | 6354671 Max Steel
Max Steel's picture

Filipino hasbara seems pissed . Lol . Fcuk over your yen .

Tue, 07/21/2015 - 02:55 | 6336006 ihot
ihot's picture

Seventh-day Adventists learned long ago from William Miller that the above mentioned loss of freedom will one day rule in USA. In fact, in 1844 W. Miller already showed from Revelation that Americans will one day be forcibly separated based on their *RELIGIOUS* views.

Tue, 07/21/2015 - 10:41 | 6336904 Johnny_is_alrea...
Johnny_is_already_taken's picture

I look at pics and vids of china today.... motorways, clean, arranged, cities with modern bus stops, lots of municipal equipements, new cars, people with new cloths and I ask

HOW DA FUCK CAN THEY STILL PUT A BAG OF NUTS AND SCREWS IN EUROPE FOR 10 CENTS ?

 

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