We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
EUR/USD
Bullish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Oil - US Crude
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Wall Street
Bullish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Gold
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
GBP/USD
Bullish
USD/JPY
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
More View more
Real Time News
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 97.06%, while traders in US 500 are at opposite extremes with 71.21%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/m74wuZZKeH
  • Commodities Update: As of 16:00, these are your best and worst performers based on the London trading schedule: Silver: 0.42% Gold: -0.03% Oil - US Crude: -0.83% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/4cYiwWIL4E
  • What financial job opportunity in which location makes the cut for you? Find out! https://t.co/rrCpMM85Rt https://t.co/4rS0V6FiEm
  • Forex Update: As of 16:00, these are your best and worst performers based on the London trading schedule: 🇳🇿NZD: 0.33% 🇦🇺AUD: 0.20% 🇨🇦CAD: -0.00% 🇪🇺EUR: -0.02% 🇯🇵JPY: -0.03% 🇬🇧GBP: -0.05% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/GOEvZ8H1yT
  • Indices Update: As of 16:00, these are your best and worst performers based on the London trading schedule: France 40: 0.33% Germany 30: 0.31% FTSE 100: 0.29% US 500: -0.23% Wall Street: -0.44% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/0oIElrc66l
  • The Federal Reserve System (the Fed) was founded in 1913 by the United States Congress. The Fed’s actions and policies have a major impact on currency value, affecting many trades involving the US Dollar. Learn more about the Fed here: https://t.co/afobcd9GRa https://t.co/bn3jPwlxks
  • Arizona virus cases rise 5.1% vs prior 4.7% 7-day average - BBG
  • The US Dollar is entering the third quarter with its safe haven status tested by rising COVID cases and trade pressures. What are the key USD catalysts in these opening weeks of July? Download the 3Q guide from @JohnKicklighter to find out here: https://t.co/z3dYpQYiJa https://t.co/Eh2Pd9YZq7
  • Forex Update: As of 14:00, these are your best and worst performers based on the London trading schedule: 🇳🇿NZD: 0.26% 🇦🇺AUD: 0.16% 🇪🇺EUR: 0.06% 🇯🇵JPY: 0.00% 🇬🇧GBP: -0.04% 🇨🇦CAD: -0.08% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/xEQQA9wfDe
  • Indices Update: As of 14:00, these are your best and worst performers based on the London trading schedule: US 500: -0.37% Wall Street: -0.69% Germany 30: -0.84% France 40: -1.05% FTSE 100: -1.45% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/8qMWUcY2fh
China Stocks at Risk as Earnings Play Up Economic Contradictions

China Stocks at Risk as Earnings Play Up Economic Contradictions

2019-04-30 04:00:00
David Cottle, Analyst
Share:

Chinese Stocks, Earnings Season, Talking Points:

  • Chinese stock markets have endured a horrible week
  • But they remain very well up for this year as a whole
  • Worries about debt, stimulus and demand mar even strong performances

Join our analysts for live, interactive coverage of all major economic data at the DailyFX Webinars. We’d love to have you along.

Investors and traders looking at China’s corporate earnings season have a multitude of contradictions to address.

The mainboards of Shanghai and Shenzhen have been among the best performing stock indexes in the world this year, notching up gains of 24% and 33% respectively since January 1. Given the economic slowdown seen in many parts of the world and ongoing worries over global trade, that is no mean feat. Still, Chinese stocks have also just endured their worst week since at least last October, with the Shanghai index shedding about 6%.

Great Start Runs Out of Steam: China 300 Index, Daily Chart

In part this split personality reflects the data. For every bright spot, such as the pleasant surprise spring by official Gross Domestic Product figures last month, there’s a darker cloud like the most recent Purchasing Mangers Index figures. These missed expectations and suggested that this year’s fight back into expansion territory may already be losing steam.

This uneasy balance seems to be visible everywhere you look. China’s industrial profits jumped a very healthy 13.9% in March, according to official figures. However, their first quarter performance was much worse. That turned in a 3.3% fall thanks to a cumulative 14% slide in January and February.

Stimulus Drives Too Much Of The Growth We See

What lies behind this economic schizophrenia is the suspicion, and in some cases the certainty, that what growth there is is largely the product of stimulus from the center. Those industrial profits were quite clearly underwritten by a coincident rise in credit growth in March. Small firms, especially, took full advantage of the Beijing-mandated objective of increased lending.

Sure enough a recent survey by Nikkei, taken with earnings season in mind, found that although profits overall are rising, there’s a clear split between the likes of Sany Heavy, which benefit from government spending largesse, and automakers like Changan which must rely on consumers who just aren’t willing to consume.

This dichotomy will probably mark the coming earnings season, and render even good results less impressive than they might have been. Perhaps perversely, even weak economic data might end up being welcomed as it may suggest that Beijing will keep the stimulus taps on. This reaction will be well-remembered from those who watched Western markets after the financial crisis when central bank action was held to be the only game in town, one which had to be kept going at all costs.

Can a Trade Deal Really Help?

What could of course swing focus back to the real economy and away from stimulus is a far-reaching trade agreement between China and the US. The US negotiating team is back in Beijing this week for yet more discussions and some in the market clearly still expect progress this month.

Whether even a major trade deal can fully put the Chinese economy back on track and enable it to grow without constant interventions from Beijing will remain a very moot point. But hopes of it may well give the economy at least a short-term boost, and, crucially, may allow the indexes to ride out any lackluster earnings shocks.

Resources for Traders

Whether you’re new to trading or an old hand DailyFX has plenty of resources to help you. There’s our trading sentiment indicator which shows you live how IG clients are positioned right now. We also hold educational and analytical webinars and offer trading guides, with one specifically aimed at those new to foreign exchange markets. There’s also a Bitcoin guide. Be sure to make the most of them all. They were written by our seasoned trading experts and they’re all free.

--- Written by David Cottle, DailyFX Research

Follow David on Twitter@DavidCottleFX or use the Comments section below to get in touch!

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES

News & Analysis at your fingertips.