Investors Remained Worried about Chinese Economic Prospects
January 8, 2024
China’s economy lost its mojo during the pandemic. No other country kept harsh social restrictions as long as China, and the abrupt lifting of such a year ago gave economic activity and aggregate demand a much smaller lift than hoped. The Shanghai Composite’s overnight drop of 1.4% overnight and 2.9% drop since end-December represent an investor vote of no confidence.
With Japan shut this Monday for the Coming of Age holiday, other Asian stock exchanges fell 1.9% in Hong Kong 0.9% in India and Indonesia and 0.4% in South Korea. U.S., German, and French share prices are in the black.
With Tokyo not participating, the dollar lost 0.6% versus the yen and also fell overnight by 0.5% against the Swiss franc and 0.3% relative to the euro and sterling.
A big winner today was bitcoin, up 2.5%, whereas the prices of oil and gold are 4.2% and 0.5% lower.
The economic data release calendar today has been thin. European statistics have been mixed. Economic sentiment in the euro area rose 2.4 points to a 7-month high of 96.4 in December, but consumer price expectations printed higher at 10.5 after 9.3 in November. German factory orders only rebounded 0.3% in November from a 3.8% monthly plunge in October and were 4.4% below their November 2022 level. A 0.3% monthly drop in retail sales in the euro area during November was the fifth month in six in which retail sales failed to increase.
South Africa’s Absa purchasing managers index for manufacturing rose to an 11-month high in December from 48.2 in November and a 27-month low of 45.3 in October.
Mexican consumer confidence remained under the 50 threshold last month, edging down a half point to a 2-month low of 46.8.
Copyright 2024, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
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