You might have missed yesterday’s Daily Edge discussing employment, rental housing, China, earnings and EVs.
China GDP Growth Fell to Near-Historic Lows China’s economy grew at one of its slowest rates in decades last year as repeated Covid-19 lockdowns hammered households and businesses.
China’s economy expanded 3% in 2022, the National Bureau of Statistics said Tuesday, a sharp slowdown from the 8.1% pace recorded in 2021. Aside from 2020, when the economy grew only 2.2%, last year marked the worst year for gross domestic product growth in China since 1976, the year that Mao Zedong’s death ended the decade of strife known as the Cultural Revolution, according to World Bank data. (…)
Retail sales, a key gauge of consumer spending, fell 0.2% from a year earlier after rising 12.5% in 2021. Growth in industrial production slowed to an annual 3.6% as factories wrestled with lockdowns and supply problems, from 9.6% in 2021.
Fixed-asset investment rose 5.1%, only slightly faster than the 4.9% pace recorded in 2021, highlighting how government spending on infrastructure struggled to offset a 10% drop in investment by a weakened real-estate sector.
Exports rose 10.5% from a year earlier, though the most recent monthly data show China’s export boom is fading as consumers in the U.S. and Europe wilt under the pressure of high inflation and rising interest rates.
China’s headline measure of joblessness, the urban surveyed unemployment rate, stood at 5.5% at the end of the year, down from a 6.1% peak in April. In one of the starkest signs of economic scarring, young workers have borne the brunt of the country’s weak year: Unemployment among those aged 16 to 24 was 16.7% in December, having peaked at close to 20% in July. (…)
Believe it, or not, Q4 GDP was +2.9% YoY, 0.0% QoQ while China was mostly locked down throughout the quarter. December industrial production rose 1.3% YoY, retail sales dropped 1.8% ((GS: -10.0%, consensus: -9.0%!);and the unemployment rate declined from 5.7% to 5.5%.
Consider this independent data:
The National Bureau of Statistics said Tuesday that China’s population dropped to 1.412 billion in 2022, from 1.413 billion in 2021. (…)
The number of births declined to 9.56 million from 10.62 million in 2021, Tuesday’s data showed. China’s birthrate—the number of births per thousand people—dropped to 6.77 in 2022, compared with 7.52 in 2021.
The data revived the question of whether China has already lost the status of the most populous country to India, whose estimated 1.4 billion population is still growing.
To underline the contrast: While United Nations forecasts see China eking out just above 10 million births in 2023, it estimates that around 23 million babies will be born in India. The U.N.’s forecasts, released in July, predicted that India will surpass China as the world’s most populous country this year. (…)
The number of deaths, which in recent years has been neck-and-neck with births, increased to 10.41 million in 2022, from 10.14 million in 2021. (…)
Already, one out of every five Chinese is 60 years or older. (…)
Investors Most Underweight on US Stocks Since 2005, BofA Poll Shows
Participants in the January poll were “a lot less bearish” than in the fourth quarter, sparking a rotation to emerging markets, Europe and cyclical stocks, and away from pharmaceuticals, technology and the US, strategists led by Michael Hartnett wrote in a note. Allocation to US equities “collapsed” during the first month of 2023, with investors a net 39% underweight the asset class, they said, exceeding even the UK’s 15%.
Both investors and some top strategists are warming to stocks globally amid optimism over cooling inflation and China’s reopening, with Hartnett saying “buy the world” earlier this month. European shares are extending their biggest outperformance on record versus the US amid cheap valuations, while emerging markets have outpaced the S&P 500 this year, entering a bull market following a rally in Chinese shares. (…)
Participants also said monetary policy is too restrictive for the first time since March 2020. They expect Federal Reserve rates to peak at 5% in the second quarter.
Even though a net 50% of respondents expect a weaker economy in the next 12 months, that’s the least bearish outlook on global growth prospects in a year as concerns about a recession fade due to China’s dismissal of its zero Covid policy. (…)
Cash levels declined to 5.3% from 5.9%, the biggest drop since June 2020.
Retail Army took a pause in selling last week Single-stock selling by “Retail” has paused in the past week as net flows bounce from lows.
JPM PI
- Retail Round Trip: Seems like retail have dumped everything they bought during the heady pandemic stimulus bull/bubble(s). (Callum Thomas)
Source: @MikeZaccardi via @MichaelAArouet