"Good News" - China GDP Beats Expectation Leaving Fed 'Relieved', Stocks Disappointed

Tyler Durden's picture

AsiaPac stocks were generally lower heading into the all-important Chinese macro data (S&P -6pts, Japan -0.7%, China -0.2%) as JPY erased Friday's ramp and crude dropped back below $47. The PBOC left the Onshore Yuan fix practically unchanged (following Friday's significant devaluation). Then the data hit... China GDP beat expectations (printing 6.9% YoY vs 6.8% exp) but is still the lowest growth since Q1 2009. Industrial Production missed (printing 5.7% YoY vs 6.0% exp). Retail Sales beat (10.9% YoY vs 10.8% exp). The initial reaction was kneejerk buying in USDJPY and stocks but that is fading as "good news" will relieve The Fed's angst over growth...

 

Before... USDJPY and S&P Futs lower (along with most of AsiaPac stocks, gold, and crude)

 

Then the data hit...

 

And then we had Chinese Retail Sales, which Beat expectations of a 10.8% YoY gain with an "easily explainable" +10.9% YoY

And Chinese Industrial Production missed, printing +5.7% YoY(against expectations of a 6.0% YoY gain)

And then the big one...

38 "qualified" economists saw China's GDP between 6.9% and 6.4% (with a 6.8% median estimate)... notably China's monthly (higher frequency data based) estimate of GDP was 6.64%.. BUT CHINA GDP BEAT EXPECTATIONS printing +6.9%!! It's a Fall Miracle!!

Bear in mind, as Bloomberg reports that China has tweaked how it reports gross domestic product to meet the International Monetary Fund’s data reporting standards.

The National Bureau of Statistics will release output for each quarter on Monday, plus a cumulative reading. It previously released quarterly economic growth but didn’t specify GDP for each three-month period.

 

The new figure makes it easier to calculate the change in output (unadjusted for inflation) in the last quarter from a year earlier, as the aggregate ones usually smoothed out volatility. This may signal a sharper third-quarter slowdown than the stable headline growth reading.

In other words, what "changes" that historically were implemented that juiced historical GDP, are now evolving out of the data and detracting from what must be 'stellar' performance given the actual data beat expectations... Thus relieving an anxious Fed and opening the door to a December rate hike no matter what...

*  *  *

The reaction... disappointment...

 

*  *  *

There was one more significant data item out of China tonight - Fixed Assets Investment - which rose just 10.3% Cumulative YoY... the lowest growth since Dec 2000...

 

Because who needs CapEx after all? Oh wait... 50% of China GDP is CapEx (never mind though, we are sure all these numbers are 'accurate').

*  *  *

Finally there is this utterly reflexive crap...

  • *CHINA'S SLOWDOWN PARTLY DUE TO FED RATE HIKE EXPECTATION: SHENG

And this...

  • *SURVEY BASED UNEMPLOYMENT STAYS AROUND 5.2%: SHENG (seems oddly familiar!!??)
  • *TPP IMPACT ON CHINA ECONOMY WON'T BE BIG, SHENG SAYS (don't tell Obama)

Charts: Bloomberg

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holdbuysell's picture

BTFD vs. STFR vs. BTFV?

I'm with Artemis. Big vol moves are inevitable.

 

NoDebt's picture

I believe all Chinese economic statistics.  Just shave 7% off the number and you have reality.  Reality is that they are in a recession with a 6.9% print (within the larger overall depression).  Just like everyone else.

 

dot_bust's picture

I agree with that estimate.

Everyone knows consumers are tapped out. American consumers, the very people who usually buy Chinese-made goods, are especially broke.

So, for China to claim that it has any growth at all is laughable.

lolmao500's picture

China's gdp will rise to the stars when they sink the US ships in the south china sea! WW3 is great for GDP!

Tallest Skil's picture

The Chinese would be better served making origami ships than the garbage they have now.

"But origami is from..."

Exactly.

Demdere's picture

I understand.  So long as both sides keep lying about their statistics, the other side is relieved.  That works to keep up markets in both countries.

Very sophisticated economic management.  I am relieved myself to see that they have everything under control.

But why are we always on the brink of a crisis, if they really have it under control?

https://thinkpatriot.wordpress.com/2015/09/28/important-things-are-not-f...

Md4's picture

BUT CHINA GDP BEAT EXPECTATIONS printing +6.9%!! It's a Fall Miracle!!"

A beat by a tenth, is not a beat.

It's a near miss, and probably massaged. It's China.

Their manufacturing growth missed, and that's more telling.

m

bigkahuna's picture

Anyone who believes any of these cause and effect relationships in the "market" are based on real mechanics is on some good drugs.

This stuff is a joke - and every time I see stuff like this happening - most of the time - I sense that someone is laughing...

Nobody For President's picture

The ones laughing have the really good drugs...

bigkahuna's picture

The ones laughing are the ones pulling the strings. They laugh because like a bunch of high order animals, we buy their BS.

They can say anything to the market and people (as well as their HFTs) believe it - and trade it.

nidaar's picture

"China GDP Beats Expectation"

Hey according to Fed's logic they now can increase interest rates. Because the last excuse they used was "problems in the global economy" (read China)...

ebworthen's picture

Raise rates you duplicitous bankster ball sack!

4%!  C'mon!  "Lift-off" is here!

Aussie Battler's picture

China the first economy ever to grow at 7% through a real estate bust and stock market crash! 

NoDebt's picture

They're 'exceptional'.  

You know one of the fastest growing economies in the 1950s was the Soviet Union?  Western economists marveled at their incredible ability to grow their economy through well-executed centralized control.  It wasn't just the A-bomb that gave rise to the Cold War.  We used to seriously shit a brick they were going to surpass us economically, too.

 

jerry_theking_lawler's picture

Exactly...and the USsA is on the same track. Central planning. Five year plans. False/erroneous statistics.

 

How long will this last? predictions?

22winmag's picture

Just add some hookers and blow and presto... better GDP numbers!

lazysunday's picture

Already included, plus all the future Ghost cities are there as well. 

Mark Mywords's picture
Mark Mywords (not verified) Oct 18, 2015 11:04 PM

As believable as Hillary Clinton being a progressive.

arbwhore's picture

Gold and silver are also "disappointed". LOL! Paper nonsense from a fake statistic.

Gnome Chompsky's picture

"The initial reaction was kneejerk buying in USDJPY and stocks but that is fading as "good news" will relieve The Fed's angst over growth..."

 

I thought I was nonplussed, but I looked up the word and now I don't think I am.

 

 

Gothic Optimism's picture

Good news? Nice. Just wait until next month and you can bet this figure will be revised lower.

J J Pettigrew's picture

So Janet Yellen's concerns over the Chinese economy were ...WRONG

SO .. the rate rise is on again....right?  Because we, before, had to keep rates at zero because

China was only growing at a 6.9 clip....

We are keeping a stimulative environment for a country that is growing at a near 7% clip?

Yellen's concerns were unwarranted, unmandated, unauthorized and WRONG.

kappal_toba_dhurr_ne_thook's picture

Who said that this 6.9% figure of China's was real? It is a total JOKE. Their real growth rate is anywhere from zero to 3%, at best.  (USA of course is in reality in negative territory.)