Why do we focus so much on China? Because the market focuses on China. If the market focused on fruit flies so would we. It's a Keynesian beauty contest - not the fruit flies but rather the second-order picking the thing the market likes/hates rather than what you like/hate.
From ZeroHedge, July 17:
US equity futures were flat erasing, a modest earlier gain, while European stocks and oil retreated as bonds rallied after the latest Chinese data dump delivered more evidence of a slowdown in the world's second largest economy, where Q2 GDP rose just 6.3%. below the 7.1% consensus forecast. At 7:30am, S&P futures were down 0.1% to 4,531 while Nasdaq 100 futures were fractionally in the green. Bond yields are 3-5bp lower, with the benchmark 10Y at 3.78%; the USD is weaker again; commodities are mixed with wheat pricing spiking after Russia terminated the Black Sea Grain deal; base metals are lower after the soften China GDP print. Yellen said US should further de-escalate US-China tension, but lifting tariffs may be premature. Fed entered its blackout period ahead of its July 26th FOMC. On the calendar today, we get the Empire Mfg. index data today at 8.30am ET (-3.5 survey vs. 6.6 prior).
In premarket trading, mega cap tech stocks are mostly higher, led by shares in Microsoft and Activision Blizzard which rose after a US appeals court denied the FTC’s bid to pause the deal. Separately, Microsoft also says it has a binding agreement to keep the “Call of Duty” franchise on the Sony PlayStation platform. Activision Blizzard rose 4.2% in US premarket trading on Monday; Microsoft rose as much as 0.9%. Here are some other premarket movers:....
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- ....Shares of electric-vehicle makers rose in premarket trading on Monday after BYD reported a three-fold increase in first-half net profit, with electric-vehicle sales showing little impact from a price war that has roiled the industry.Among premarket movers: Tesla rose 1.7% and Lucid was up +2.1%.
The MSCI ACWI of stocks worldwide dipped 0.1% on Monday after surging 3% last week. Shares in mainland China were the worst performers in Asia. After a week of historic stock-market gains, investors started Monday on a downbeat note after data that showed China’s growth for the second quarter missed estimates and its youth unemployment rose to a fresh, and dangerous, record high of 21.3%....
....MUCH MORE
The other things to know about China: 1) it's very important in its effect on the world economy and 2) China's social/political/economic system is in flux, meaning, if you can get on the right side of long term trends, life is a bit easier when dealing with the details.
Not as easy as John Templeton buying Japan at 2 - 3 times earnings, but easier than if you are fighting the larger trend while being right on the micro.
