{"id":6297,"date":"2023-05-09T12:37:49","date_gmt":"2023-05-09T16:37:49","guid":{"rendered":"https:\/\/ifintechworld.com\/investing\/trade-data-reflects-global-slowdown\/"},"modified":"2023-05-09T12:37:50","modified_gmt":"2023-05-09T16:37:50","slug":"trade-data-reflects-global-slowdown","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=6297","title":{"rendered":"Trade Data Reflects Global Slowdown"},"content":{"rendered":"
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Key News<\/h3>\n

Asian equities were mixed overnight as Hong Kong underperformed.<\/p>\n

China released April trade data overnight that sent markets lower. The decline in export growth was expected due to slowing global growth, which is leading to declining demand for products from the world\u2019s factory. To be clear, exports were still up year-over-year (YoY), but the YoY growth was considerably lower than in March. Somewhat surprising, and likely a major factor in last night\u2019s market moves, was the sharp decline in imports, which may lead some to question China\u2019s economic recovery. However, imports declined in March too. This could also be due to semiconductor export restrictions showing up in the trade data.<\/p>\n

Today\u2019s pullback in Mainland markets was also driven, in part, by the unwinding of the popular \u201cstate-owned enterprise (SOE) revaluation\u201d trade, which began with the People\u2019s Congress\u2019 particular emphasis on SOE reform. This is a \u201cbuy the rumor and sell the news\u201d type of situation as many have recognized that the excitement around potential reforms had driven some SOE stock prices too high and decided to take profits. Interestingly, according to broker chatter an SOE ETF will be launching on the Mainland.<\/p>\n

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China will release April purchasing managers\u2019 indexes (PMIs) tomorrow (tonight from a US perspective). Watch for the services PMI\u2019s continuing relative strength versus manufacturing, which was hinted at in the export data. China\u2019s economic recovery is driven by domestic consumption.<\/p>\n

Warren Buffet\u2019s Berkshire Hathaway cut its stake in BYD to below 10%. But, BYD\u2019s stock was flat on the day.<\/p>\n

Growth and value factors were both lower today. Real estate was an interesting outperformer in both Hong Kong and Mainland China.<\/p>\n

An analyst at a major global bank said that Alibaba\u2019s spin offs of its cloud business will likely seek a Mainland listing, rather than a US or Hong Kong listing. This is positive for Mainland markets such as the STAR Board, where the pre-profit businesses are apt to list. Meanwhile, international E-Commerce and other businesses that lack sensitive data may still list overseas to tap into deeper capital markets and increase international recognition. I believe that the IPO market in Mainland China will be stronger than in the US this year due to the drying up of liquidity in the US following rate hikes. I recommend watching this space.<\/p>\n

The Hang Seng and Hang Seng Tech indexes closed lower by -2.12% and -2.95%, respectively, overnight on volume that increased +13% from yesterday. Mainland investors net purchased $120 million worth of Hong Kong stocks via Southbound Stock Connect. The top-performing sectors were utilities, energy, and real estate. Meanwhile, healthcare, technology, and materials were among the worst.<\/p>\n

Shanghai, Shenzhen, and the STAR Board closed lower by -1.10%, -1.17%, and -2.18%, respectively, overnight on volume that increased +8% from yesterday. Foreign investors net purchased $125 million worth of Mainland stocks via Northbound Stock Connect. The top-performing sectors were real estate, consumer staples, and utilities. Meanwhile, communication services, energy, and industrials were among the worst.<\/p>\n

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Last Night’s Performance<\/h3>\n

Last Night\u2019s Exchange Rates, Prices, & Yields<\/h3>\n