Checking up on China

Out of the blue in these last few weeks, we started to hear some negative news from China.  Remember, this has been an ongoing concern from the "chicken littles" for the last 10 years, but they were so wrong, or so early, that they have quietened down in the last few years.  Last week, however, we got these news clips.

Let me start off with a chart from Ed Yardeni's blog.  (I hope you are taking advantage of this excellent site that is one of my favorites.)

In Yardeni's chart above, you can see that recent drop in China's M-PMI released last week.

Also, in a recent report, I mentioned how the Baltic Dry Freight Index had improved, which often tells of an improvement in the Chinese economy. 

That did occur...temporarily; however, in the last week, those gains have dissipated, adding to the concerns of the Chinese problems.

Don Hays

Please see important disclosures at the bottom of this page.