Monday, 19 October 2015

A few macro thoughts today

A few macro thoughts today...

Chinese growth - China GDP (YoY) Q3: 6.9% (exp 6.8% prev 7.0%).  GDP growth slowest this century...

...but clearly could be worse.  Some early reaction here.  Of the other numbers China Retail Sales (YoY) Sep: 10.9% (exp 10.8% prev 10.8%) fine but industrial numbers (e.g. China Industrial Production (YoY) Sep: 5.7% (exp 6.0% prev 6.1%)) a bit weaker.  


Perhaps the most useful number is that Chinese Services Accounted For 51.4% Of GDP As Of End Of Sep = the rise of the Chinese consumer continues apace

ECB QE – despite some very aggressive weekend press talk about Draghi unveiling something very shortly, Nowotny comments here worth noting downplaying such talk:.

Highlights: Too early to talk about extending QE beyond September 2016. Fiscal, structural policy effort needed to help growth. Says fiscal policy in euro area not 'growth-enhancing'.  

Greece – the Trokia are returning to Athens this week.  Whilst the Sunday Times is talking about plans for a bad bank will be ditched in favour of selling bad loans to various investment banks/private equity houses, challenges remain as ‘only 30 percent of prior actions required by the bailout program have been legislated. Now the finance ministry must rush to implement 49 prior actions in order to avoid further delays that may postpone the 2-billion-tranche Greece expects to receive’ as noted here.

Greek banks meanwhile remain call options at best:


Chinese President Xi’s visit to the UK – want to understand why this is important? Read this: ‘Schools, banks, and property: The UK’s real value to China, charted'  


Japan / ageing population – another influence of poor demographics:

'Japan’s Longevity Champs May Not Win Even Silver Anymore. So many hit the 100-year mark that nation may downgrade recognition award' (link here). 

UK dividend growth – via today's Financial Times dividend growth is fading…but where you can find good sustainable and hopefully progressive yield, I still think it is one of the most interesting parts of the market currently from a total return perspective: 

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