Strong new orders lift China HSBC flash PMI to 7-month high in October

An employee works inside a steel factory in Caofeidian on the northeastern coast of China's Hebei province, October 11, 2013.

Credit: Reuters/China Daily

By Natalie Thomas

BEIJING | Thu Oct 24, 2013 12:19am EDT

BEIJING (Reuters) - Strong new orders drove the fastest expansion in China's manufacturing sector in seven months in October, a preliminary survey showed on Thursday, more evidence that the economy is stabilizing although a strong rebound remains elusive.

The flash PMI figure, the earliest reading of China's monthly economic performance, offers some positive news after disappointing export figures and September's manufacturing PMI, which had shown weak domestic demand.

The Markit/HSBC Purchasing Managers Index (PMI) stood at 50.9 in October, above September's final reading of 50.2 and marking a seven-month high. Ten of 11 sub-indices rose.

"China's growth recovery is becoming consolidated into the fourth quarter following the bottoming out in the third quarter" said Qu Hongbin an HSBC economist in a statement.

"This momentum is likely to continue in the coming months, creating favorable conditions for speeding up structural reforms."

New orders rose to 51.6, the highest in seven months and well above the 50 line separating expansion from contraction.

"From what we can see companies have drawn down inventories now, so once you get a little bit of demand you get orders coming in," said Stephen Green, an economist with Standard Chartered bank.

The strong reading lifted Chinese stocks off two-week lows, although investors are jittery about possible policy tightening by the central bank to put a cap on rising inflation and housing prices. Those fears have seen short-term money rates surge this week.

GROWTH SEEN SLOWING

In the first nine months of the year, the $8.5 trillion economy grew 7.7 percent from a year earlier, putting it on track to achieve Beijing's 2013 target of 7.5 percent, which would be the weakest growth in 23 years.

Still, many economists see growth slowing ahead as global demand remains soft and as Beijing restructures the economy towards one driven more by consumer demand than investment and credit.

"Despite the rise of this flash PMI reading, we believe sequential GDP growth peaked in the third quarter at 2.2 percent and people should expect moderation to a more sustainable growth rate of 1.8-2.0 percent in the fourth quarter," said Ting Lu and economist with Bank of America-Merrill Lynch.

The government has repeatedly stated it will accept slower growth during the restructuring, but policymakers have also shown a willingness to step in to keep growth stable.

The flash PMI showed new export orders ticked up only marginally, suggesting a stabilization in global demand but no solid rebound.

Exports unexpectedly fell 0.3 percent in September, as fears of a tapering in U.S. monetary stimulus weighed on demand from Southeast Asia. Exports were a drag on the economy in the first three quarters, subtracting 1.7 percentage points from growth.

Policymakers stated they would support the trade sector if it looked like missing an 8 percent growth target for this year.

Bank of America's Lu urged caution on attaching too much significance to the flash PMI figures.

"We should keep in mind that the HSBC flash PMI is quite volatile and the final reading could vary significantly from the flash," said Lu.

"The HSBC PMI has a quite small sample size with undisclosed number of missing values."

Last month's final PMI figures delivered a shock to the markets, coming in a full point below the flash reading for September.

The flash PMI is based on 85-90 percent of total responses for each month.

(Reporting By Natalie Thomas; Editing by Kim Coghill and John Mair)

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Humorous docu-vid makes strong case against 'artificially' low speed limits

Road safety is not to be taken lightly. Each year, thousands die on American roads, with driver error as a leading cause. Throughout motorized history, one of the prime ways used to curb deaths has been through speed limits. But are today's speed limits too low? We see both sides of the argument, even though we yearn to live in a world where we can go as fast we want (we hear that place is called "Germany"). More importantly, are speed limits set intentionally low so that – *gasp* – municipalities can make money off of ticket revenue?

This video, by Six 7 Films, doesn't advocate for a world without speed limits. Rather, the Vancouver-based film takes a hard look at what it calls artificially low speed limits that exist for no other reason than to line the pockets of insurance companies, governments and fuel media hand-wringers. It also suggests that roads might actually be safer if people were moving a bit more quickly. The spot isn't all doom-and-gloom seriousness, though, as it features a few entertaining pop culture references from Super Troopers, Back To The Future and The Simpsons. Even the inimitable George Carlin makes an appearance. Take a look below at the video, and the let us know what you think about the state of speed limits in Comments.

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Humorous docu-vid makes strong case against 'artificially' low speed limits

Road safety is not to be taken lightly. Each year, thousands die on American roads, with driver error as a leading cause. Throughout motorized history, one of the prime ways used to curb deaths has been through speed limits. But are today's speed limits too low? We see both sides of the argument, even though we yearn to live in a world where we can go as fast we want (we hear that place is called "Germany"). More importantly, are speed limits set intentionally low so that – *gasp* – municipalities can make money off of ticket revenue?

This video, by Six 7 Films, doesn't advocate for a world without speed limits. Rather, the Vancouver-based film takes a hard look at what it calls artificially low speed limits that exist for no other reason than to line the pockets of insurance companies, governments and fuel media hand-wringers. It also suggests that roads might actually be safer if people were moving a bit more quickly. The spot isn't all doom-and-gloom seriousness, though, as it features a few entertaining pop culture references from Super Troopers, Back To The Future and The Simpsons. Even the inimitable George Carlin makes an appearance. Take a look below at the video, and the let us know what you think about the state of speed limits in Comments.

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[Strong, But Mixed Messages] 5-2013 Manhattan/Brooklyn Rental Report (Matrix)

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Survey: Demand in the industry is strong, but the pace of expansion has begun to slow down

Wireless is one of the few industries that actually grow these days, but it looks like the pace at which it spreads has started to slow down. Research firm PwC has made a thorough survey of the US market, using data from all major carriers. One of the most interesting findings of the survey is that while wireless network traffic has grown by the staggering 138% in the period of June 30, 2010 to June 30, 2011, it has grown by "just" 76% from June 30, 2011, to June 30, 2012.

However, according to PwC, it's too early to conclude that the industry is reaching its pinnacle:

Yep, at least carriers won't be so pressed for bandwidth, though we aren't sure if they would like that.

Other than that, the survey finds that smartphones continue to penetrate the market, and have accounted for 60% of sales to postpaid customers in 2011, as opposed to 41% in 2010. In order to make up for the slower growth, however, carriers tend to turn to new growth areas such as multi-device data
connection plans and machine-to-machine (M2M) subscriptions. To find the full survey, simply jump through the source link below!

source: PwC (.pdf) via FierceWireless

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Strong summer sales lift hopes for autumn

LEADING Gold Coast agents and property experts are predicting bumper sales in the traditionally quieter autumn selling season as momentum continues to build following a strong summer.

Autumn is often referred to in the industry as a shoulder period, a period that falls between the peak and low seasons, but agents are reporting increased buyer activity in the lead-up.

Ray White Broadbeach principal Larry Malan said many sellers who had been on the sidelines would decide to list over autumn.

"I think autumn is going to be a very strong season," he said.

"It seems to be that a lot of people were waiting to see what happened with the January auctions and because there had been such demand they have decided it is a good time to sell."

Mr Malan said his agency was seeing strong inquiries for the 22 properties it had going to auction over the Easter period.

He said most activity would be in the mid-range of properties priced between $400,000 and $800,000.

Ray White Broadbeach sold more than $23 million worth of property in the month of February.

Harcourt GC Central business owner Grant Stephens said inquiries for the Easter period were already strong, particularly from interstate buyers and workers in Queensland mines.

"Easter is going to be very, very good," Mr Stephens said. "Inquiries have already been excellent."

Mr Stephens said properties listed for less than $800,000 were "flying out the door" and positive indicators for the market had included multiple offers on the same property and a drop in the number of contracts falling over.

He said one property the agency was marketing on the Isle of Capri had four offers in five weeks.

"We can definitely see activity start to build again," he said.

"Normally we drift into autumn and it's a quieter period."

Professionals John Henderson Real Estate principal Andrew Henderson said he expected the momentum from summer to continue into autumn.

Mr Henderson, whose office had its best sales for five years during summer, said economic factors were more important than seasonal ones.

"There has not been the seasonal swings there have been in the past," he said. "It's more the economic factors that make a difference like low interest rates and people having stability in their employment.

"Sales have been a lot stronger and I don't think there's anything that will stop that other than a lack of stock."

Mr Henderson estimated 70 per cent of the buyers were owner-occupiers and this shift meant holiday investors (who look in summer and buy in the autumn) were not playing as active a role in the market as they had in the past.

He said sellers were also more influenced by the state of the market and not seasonal factors.

"The sellers we've been talking to have seen a few things moving and they think now is a good time to put their home on the market."

Colleen Coyne, of Colleen Coyne Property Research, said strong sales at the January auctions had provided a boost to confidence in the market which was ongoing.

"We had a strong take-up at the Ray White Surfers Paradise auctions in January and confidence is still there in the market and people are actively considering purchasing," Ms Coyne said. "I do not expect prices to fall much."

With interest rates expected to remain low, she said investors would be more confident.

"Timing is good for investment," she said. "Volumes have to pick up before we see price improvement."

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Strong US Data Sent Shares to New Highs

ONG Focus | Insights | Written by Oil N' Gold | Fri Mar 15 13 01:03 ET

Financial markets remained firm as driven by encouraging US economic data. Dow Jones Industrial Average rose for a 10 consecutive day, the longest string since 1996, and ended the day +0.58% higher. The S&P 500 index also soared to a record high, adding +0.56% at close. In the commodity sector, the front-month contract for WTI crude oil gained +0.55%. Brent crude rebounded for the first time in 5 days with the front-month contract climbed +0.83% during the day. Gold continued to trade below 1660.

US initial jobless claims surprisingly fell to 332K in the week ended March 10, down from a upwardly revised 342K in the prior month. The 4-week average, therefore, reached a new, post-recession low of 347K last week. Continuous claims slipped -89K in the week ended March 9. PPI surprisingly gained +0.7% m/m in February, up from +0.2% a month ago as driven by sharp +3.0% increase in energy price. Food inflation, however, eased and indeed dropped -0.5% during the month. Core PPI climbed another +0.2%, same as in January. On annual basis, both headline and core PPI added +1.7% last month.

In the Eurozone, Spain successfully issued 803M euro of long-term bonds in a special auction. Yet, 10-year yields still closed up +9 bps. President of the European Council Herman Van Rompuy stated after the first day of EU meeting that “the situation across Europe is of great concern” but policymakers have pursued “clear and consistent” objectives such as restoring financial stability, reducing the unemployment rate and improving long-term growth prospects. Meanwhile, news reported that the ECB was discussing how to ease funding costs for SMEs in debt-ridden countries. Regarding this, ECB governing council member Erkki Liikanen stated that “this is a difficult question but I can say it is on our table, under consideration”. Yet, President Draghi Mario denied, saying that the central bank is “not at this point in time ... committing or planning anything special".

Today, US headline CPI probably gained +0.4% m/m in February, up from the flat reading a month ago. On annual basis, inflation added +1.8% in February, compared with a +1.6% gain a month ago. Core inflation is expected to have risen +2.0% y/y last month. University of Michigan confidence probably edged up +0.4 point to 78 in March while industrial production in the world’s largest economy climbed +0.3% in February, following a -0.1% drop a month ago.

 

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