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Futures Soar After Chinese Composite PMI Drops To Lowest On Record

Tyler Durden's picture




 

Chinese markets may be closed for the next week due to a national holiday but China's goalseeked manufacturing survey(s), which were the most anticipated data points of the evening, came right on schedule (or rather, were leaked just ahead of schedule). And they certainly did not disappoint in their disappointment.

First, it was the official NBS September PMI, which at 49.8 was the smallest possible fraction above both the previous and expected, both of which were 49.7. The number was leaked about 6 minutes before the official statement, and while the leaked print which all humans were aware of well before the official release time at 9pm Eastern, had no impact on markets, it was the flashing red headline which confirmed the leak and which was read by machine-reading algos everywhere, that sent the E-mini spasming higher.

But while the official "data" was bad, and confirmed the economy remains in contraction, the Caixin - aka the new HSBC - Markit PMIs were absolutely atrocious.

We bring you... the HSBC Manufacturing print, which dropped from 47.3 to 47.2, and which according to Caixin was the lowest print since March 2009.

From the report:

A key factor weighing on the headline index was a sharper contraction of manufacturing output in September. According to panellists,
worsening business conditions and subdued client demand had led firms to cut their production schedules. Weaker customer demand was highlighted by a further fall in total new orders placed at Chinese goods producers in September. Furthermore, the rate of reduction was the steepest seen for just over three years. Data suggested that the faster decline in total new business partly stemmed from a sharper fall in new export work. The latest survey showed new orders from abroad declined at the quickest rate since March 2009.

The job market continued to be a disaster:

Reflective of lower workloads, manufacturing companies cut their staff numbers again in September. Moreover, the latest reduction in employment was the fastest seen in 80 months. Meanwhile, reduced production capacity led to an increased amount of unfinished work, though the pace of backlog accumulation was only slight.

And then there's deflation: 

Manufacturing companies noted a further steep decline in average cost burdens during September. Furthermore, the rate of deflation was the sharpest seen since April. Reports from panellists mentioned that lower raw material prices, particularly for oil-related products, had cut overall input costs. Increased competition for new work led manufacturing companies to generally pass on their savings to clients, as highlighted by a solid decline in output charges.

Summarizing the finding:  Production cut at quickest rate since March 2009; Total new orders contract at sharper rate amid steeper downturn in new export business; Worst deflation since April; job shedding accelerates to 80-month record, and so on.

At the same time, the Service PMI was also released which at 50.5, was a drop of 1 point from the 51.5 in August, and was the lowest since July 2014, with the prices charged index in full deflationary collapse, tumbling from 51.4 to 48.5, the lowest since June 2012, with the outstanding business index was the lowest since last November. In short: another disaster.

And it was the combination of the two indices that told the full story: at 48.0, the Caixin Composite index dropped from 48.8, down from 52.3 a year ago and was the lowest print on record.

So with another month of atrocious manufacturing and service survey data released what do futures do? Why they soar of course, with the ES now up nearly 20 points from its overnight lows, and touching on 1920.

Why? Who knows - futs would have likely soared if the data was good, but wild guess here, because the Chinese economy is in such a dire state of uncontrollable freefall, someone, somewhere has to print more and make the rich even richer.

 

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Wed, 09/30/2015 - 22:41 | 6614257 Atomizer
Atomizer's picture

Watch the Forex shuffle. You'll figure it out. Quantitative Expense shell game. 

Wed, 09/30/2015 - 23:34 | 6614401 aint no fortuna...
aint no fortunate son's picture

and of course that which is printed will never be put to productive economic use

Thu, 10/01/2015 - 06:47 | 6614872 Trips Trading
Trips Trading's picture

The S&P500 4h chart shows a pattern of Negative Reversal (RSI Higher highs while Price sets Lower Highs). Target Price is 1850 and 1830. 


http://tripstrading.com/2015/10/01/sp500-negative-reversal-rsi-4h-chart-and-putcall/

Wed, 09/30/2015 - 22:41 | 6614258 DirkDiggler11
DirkDiggler11's picture

Pure insanity. The markets are so rigged the ones doing the manipulating don't even attempt to fly under the radar anymore. It would be funny if it wasn't just plain sad watching these sick hubris filled central banker pole smokers ruin the financial system across the entire planet.

This is why I buy gold, silver, food, ammo and whiskey.

Thu, 10/01/2015 - 01:33 | 6614607 Perimetr
Perimetr's picture

The Chinese composite could be a hot turd that dropped out of Yellen's pants . . . it doesn't matter, they will spin anything they can dream up to prop up the markets with their phoney electronic dollars.

And this will continue until the manufacturing coountries tell us to put those dollars back where the sun doesn't shine . . . .

Thu, 10/01/2015 - 01:58 | 6614629 Wile-E-Coyote
Wile-E-Coyote's picture

Be careful the police report could read: "Drunk man dies while cleaning loaded gun" of course the shiny stuff will have to be confiscated.

Wed, 09/30/2015 - 22:43 | 6614259 arbwhore
arbwhore's picture

Moar Tesla X's all 'round! No end to the free money party!

 

... and by "all 'round" I mean only for those who can afford to pay $140000+ for a car that can travel 250 miles before it needs to stop for an hour or more.

Wed, 09/30/2015 - 22:56 | 6614291 knukles
knukles's picture

Please, don't get me going.  The whole Tesla/electric car/Obama/subsidy/clean as in not/conservation/pollution thing has just about everything wrong that can be wrong in just about every way possible.

PS  The press is saying that the data print form China is stronger than expected and everything is looking kinda great.  Squinty, but great. 

Thu, 10/01/2015 - 02:00 | 6614631 Wile-E-Coyote
Wile-E-Coyote's picture

I know I was reading about it yesterday, fucking nuts.

Wed, 09/30/2015 - 22:48 | 6614279 lasvegaspersona
lasvegaspersona's picture

like mom always said...you are a very bad boy, which is very good...we had a weird family...

Wed, 09/30/2015 - 22:51 | 6614288 Tim Knight from...
Tim Knight from Slope of Hope's picture

GARTMAN!

Wed, 09/30/2015 - 22:52 | 6614290 Id fight Gandhi
Id fight Gandhi's picture

Wasn't the HSBC banned to report these? Is there a cutoff date?

Wed, 09/30/2015 - 22:53 | 6614293 Seasmoke
Seasmoke's picture

Nothing makes sense any more. Which now makes sense. 

Wed, 09/30/2015 - 22:54 | 6614296 Atomizer
Atomizer's picture

Kerry Tells Russia Not To Strike Al Qaeda and ISIS.

http://thepeoplescube.com/peoples-blog/kerry-tells-russia-not-to-strike-...

Wed, 09/30/2015 - 22:58 | 6614311 Osmium
Osmium's picture

Putin tells Kerry to suck a bag of dicks

https://PutintellsKerryToSuck-A-Bag-Of-Dicks

Wed, 09/30/2015 - 23:12 | 6614359 SHRAGS
SHRAGS's picture

Atomizer, your link is broken, this should work: http://thepeoplescube.com/peoples-blog/kerry-tells-russia-not-to-strike-...

Wed, 09/30/2015 - 23:05 | 6614332 MFL8240
MFL8240's picture

These fucking games are getting old!

Wed, 09/30/2015 - 23:17 | 6614365 antonina2
antonina2's picture

Hmmmm, they must have revised Aug to 47.0, becuse it now looks like the number goes up from lst month, mybe they refigured it for summer being such a bad time for accurate data.  I don't trust China's data anyhow.  And, now we are up 15 pts....

Wed, 09/30/2015 - 23:18 | 6614366 Yen Cross
Yen Cross's picture

   It's different this time. </sarc>

Wed, 09/30/2015 - 23:32 | 6614398 thismarketisrigged
thismarketisrigged's picture

FUNDERMENTALS!!!!

Wed, 09/30/2015 - 23:39 | 6614416 joego1
joego1's picture

Bend over Coxin!

Thu, 10/01/2015 - 06:11 | 6614824 Not Goldman Sachs
Not Goldman Sachs's picture

Can you feel it now? Cox in.

Thu, 10/01/2015 - 00:32 | 6614529 lester1
lester1's picture

The Fed's plunge protection team is doing the rigging buying stocks. Even when the data is bad PPT still buys stocks.

 

Audit the Fed !!

Thu, 10/01/2015 - 00:32 | 6614536 besnook
besnook's picture

it is so neat to watch an economy work the way it is supposed to with all the decreasing demand, more competition, declining costs in materials and labor, cost cutting talk.

Thu, 10/01/2015 - 00:52 | 6614572 Sanity Bear
Sanity Bear's picture

I'm watching the weather forecasting for what is now Cat 3 Hurricane Joaquin, and they've all been wrong by huge amounts https://twitter.com/wxbrad/status/649438797453762560

 

could not help but to be reminded of GDP forecasting

Thu, 10/01/2015 - 01:03 | 6614575 Phoenix901210
Phoenix901210's picture

Zerohedge once made a comment on twitter; 'have we reached peak bullshit'?

To which I responded: Whoa, whoa, whoa, WHOA. I mean, whoa. Let's not go too far here. (Or something like that).

Because there's always more bullshit right?

I think this, this 'is' peak bullshit!!!!

Thu, 10/01/2015 - 05:14 | 6614778 CHX
CHX's picture

Bad news are good news again, so surely we are "around the corner" now, right?

HAHAHAHAAAA, what a $#¡† $#øw...

Thu, 10/01/2015 - 06:00 | 6614818 new game
new game's picture

i think the selling into this false strength will presist.

lower highs and lower lows as the charts are screaming.

real sellers are cashing out. think corp bond financing buying stock and insiders cashing out.

not to mention layoffs at cat, ect...

patience, another 1000 pt whooosh a coming-inevitable...

Thu, 10/01/2015 - 06:27 | 6614850 Wahooo
Wahooo's picture

What lower highs?  The market was up yesterday and appears to be about to put in a 300 dow day.

Thu, 10/01/2015 - 06:30 | 6614855 crashguru
crashguru's picture

dropped from 47.3 to 47.2

 

So That is now called "uncontrollable freefall".

What are you guys smoking??

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