This ETF Gets Ready For More China Data (FXI)
Some of the biggest numbers are coming out of Beijing this week, and given reaction to last week’s lending reserve move, the market will be hanging on every detail.
The Shanghai market fell another 3% last night, bringing its total slide since early November back to 14%. Traders are not sanguine at the prospect that Chinese inflation continues to increase faster than the local government can shuffle the parameters of the lending rules — and might prompt more aggressive intervention in the form of higher interest rates.
As it is, with Chinese real estate prices climbing despite Beijing’s best efforts to control what still looks like a potential bubble on the horizon, the Chinese economy is looking less like a cozy “best of both worlds” situation and more like a dangerous tightrope for the entire world to walk.
Watch Wednesday night for full-year GDP, inflation and industrial production data.
Economists are looking to see GDP come in at 10.2% over the last year — not bad by any stretch of the imagination, but still a bit cooler than the 10.6% rate that China enjoyed in the previous year.
Any number on December industrial production over 13.4% growth should get the market excited, while retail sales likely stayed constant with 18.7% expansion.
The key numbers are of course inflation. Economists hope to see wholesale prices slowing to an annual inflation rate of 5.7% while the CPI dips to 4.6%. Anything more may add to the economic angst currently gripping Shanghai, and that may not bode well for the broad funds like the iShares FTSE China 25 Index ETF (NYSE:FXI).
Emerging Money provides insightful and timely information about the increasingly important world of Emerging Market investments. CNBC Emerging Markets Contributor Tim Seymour leads the team of Emerging Money to bring you cutting edge global news and analysis.
About Tim Seymour: Tim is a founder of Emerging Money. He is a founder and Managing Partner at Seygem Asset Management, and The Emerging Markets Contributor to CNBC. Seygem Asset Management focuses on investing throughout the global emerging markets asset class. With a view that emerging and developing economies will continue to outpace the economic growth and advancement of developed economies, Seymour has devoted a career to investing in the dominant markets of tomorrow, today. Seymour’s career has included significant experience in both alternative asset management (hedge funds) and capital markets, having launched two hedge funds, and built the largest Russian broker dealer in the USA. Seymour started his career at UBS, focusing on international credit (cash, swaps, forex) in a specialized hedge fund group (New York). Seymour completed the firm’s training program after graduating with an MBA in international finance from Fordham University. Seymour received his undergraduate degree at Georgetown University.