Wall Street Strategies
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The Middle Kingdom

9/14/2015
By Charles Payne, CEO & Principal Analyst

China matters…period.  Over the last few months, I’ve found it interesting how many people, including analyst danced on the presumed grave of China as if somehow A) it wouldn’t impact America B) it wasn’t a proxy for the global economy, and C) our situation was much better or different.  China is critical and it has to find a way to pull out of this hard landing, and even pick up the pace.

I think they’ll come up with a plan that will kick their can down the road just as every other nation (from Greece to Japan to America) has done.  In the meantime, here is a glimpse of how important China is to the world’s economy.

With this in mind, it’s interesting; last night, China had bad economic news that America would love to have.

  • Fixed Asset +10.9% YTD…the slowest since 2001
  • Factory Output +6.1% …Street looking for 6.4%
  • Real Estate Investment +3.5% YTD…the slowest since 2009

I still think the real estate situation in China is significantly more critical than the gyrations of their stock market.  On that note, some kind of stimulus, which will be massive, has to include provisions for infrastructure.  Note: Last week, earth excavator sales declined 33% year–over-year in China.

The Fed might dominate the headlines, but the market might move the most on China’s stimulus news- it had better be big to match the hype.

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Charles Payne
Wall Street Strategies


 

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