Trade Wars Slam Chinese Retail Sales, Investment Growth Weakest In 21 Years

Source: Bloomberg

… tonight’s macro data dump from China is expected to show continued slowing from Q3’s disappointing GDP print.

Bloomberg Economics’ Chang Shu notes that the October activity data are likely to show weakness continuing to spread across China’s economy, as companies adjusted to an additional 15% U.S. tariffs on $110 billion of Chinese goods in September.

• China Industrial Production MEET +5.6% YoY vs +5.6% YoY Exp
• China Retail Sales MISS +7.2% YoY vs +7.8% Exp
• China Fixed Asset Investment MISS +5.2% YoY vs +5.4% Exp.
• China Property Investment FELL to +10.3% YoY from +10.5% YoY
• China Surveyed Jobless Rate FELL to 5.1% from 5.2%

This is the equal weakest retail sales growth since 2003 and weakest Fixed-Asset Investment growth since 1998..

Source: Bloomberg

This data confirms that China’s economy slowed further in October, signaling, as Bloomberg’s Miao Han notes, that policy makers’ piecemeal stimulus is failing to boost output and investment amid ongoing trade tensions with the U.S. and subdued domestic demand.

As a reminder, there was the surprising divergence in the two manufacturing PMI readings, with the “official” version weakening, and the Caixin-labeled version strengthening.

Source: Bloomberg

Dow futures are exuberantly surging overnight as yuan continues to slide – disagreeing vehemently over the chances of a US-China trade deal after their joint celebrations last week…

Source: Bloomberg

Finally, as we just noted, The National Institution for Finance and Development (NIFD) on Wednesday said that China’s economic growth rate will slow to 5.8% in 2020 from an estimated 6.1% this year, a number which is already quite ambitious, not to say artificially goalseeked.