In case you are interested, I took a 14-hour tour of Barcelona yesterday with a native who grew up in the “area.” She took me to places found on the standard tourist list, but we also went places the average tourist would not know about. It is really cool to have a guide that knows the ins and outs of a rather large city in Spain. For those who have not seen Barcelona, I would suggest putting it on your bucket list, if you have one …
Is everyone strapped in? I hope so, because the ride is about to begin. Yesterday, the market flew higher because it heard rumors of China beating GDP estimates. Today, the actual news came out, and, in fact, China not only failed to beat expectations, it came in under expectations. Just when you think the market is actually starting to operate on the facts …
“We are comfortable with our 8.6 percent annual GDP growth forecast, and we expect year-on-year GDP growth to rebound to 8.5-8.6 percent in coming quarters. We don’t think Beijing has an appetite for higher growth as that will raise prices of raw material imports and re-ignite inflation,” Ting Lu, China economist at Bank of America/Merrill Lynch in Hong Kong, said.
Now, that is helpful, an analyst that sees the reality of the situation in China. Once again, China is purposefully slowing its economy down, and I just don’t get what it is about that reality that the market does not get. The Chinese plan is working, and in the end, that is EXACTLY what the global economy needs – a stable, low-inflation, Chinese economy based on more on domestic consumption rather than exporting its way to a big GDP.
China is doing what it said it would (remember, it has a plan), and it is beginning to re-stimulate its economy slowly and carefully, so as not to 1) reignite inflation, 2) re-stimulate the housing sector which has grown to fast, and 3) not exacerbate the loan issues in the rural provinces. Yes, it is all coming together.
March money supply data released on Thursday suggested that a recovery might be gaining traction, with new loans made in the month topping 1 trillion yuan ($158.55 billion) for the first time since January 2011, coming in about 25 percent ahead of expectations after two straight months of underperformance.
As to the not-so-hot-anymore Chinese real estate issue, the one analysts were citing as a reason the Chinese economy would not have a soft landing while engineering itself away from rampant inflation …
Residential real estate investment in March grew at its slowest annual rate since mid-2009.” Looking at the property data, it seems that property investment has finally started to correct.
Let’s all just stick to the facts, please. And speaking of that noble concept …
Back in January, Joseph Granville called for the Dow to land near 8,000 by the end of this year. This is the man who in January, 1981 told the market to sell everything and the next day the Dow dropped 2.4%. This is the man Timer’s Digest rated the #1 market timer in 2011. Well, this forever-young man has been hit and miss over the years, but his prediction the bull rally would end in January has clearly missed the mark. Just some food for thought. Hey! Anybody got a coin?
Trade in the day – Invest in your life …
