China
Posted: Sun Aug 30, 2015 8:29 pm
Below is cut from Zachs' "Market Insights" report dated August 31, 2015
"China Woes Overblown – an early gauge of China’s factory activity fell to a six-and-a-half year low in August, despite China’s efforts to boost economic growth with monetary easing—and that has investors worried. But I see two issues with this narrative: 1) haven’t we already known for some time that China was expected to slow? What is the ‘new news’ here? 2) China still expects to grow 7% on year, perhaps a bit less now. Is that really powerful enough to send the expanding global economy into a full-on recession? I simply don’t believe that if China grows, say, 6.5% instead of the expected 7%, that it will somehow send the rest of the world into a downward spiral. I see this as a “false fear.”
I did some checking of my own.
> Only 20% of the total energy consumption in China is from burning oil (this includes transportation fuels)
> China has just started filling two new strategic petroleum sites
Based on everything I'm seeing, the global market will be much tighter by year-end.
"China Woes Overblown – an early gauge of China’s factory activity fell to a six-and-a-half year low in August, despite China’s efforts to boost economic growth with monetary easing—and that has investors worried. But I see two issues with this narrative: 1) haven’t we already known for some time that China was expected to slow? What is the ‘new news’ here? 2) China still expects to grow 7% on year, perhaps a bit less now. Is that really powerful enough to send the expanding global economy into a full-on recession? I simply don’t believe that if China grows, say, 6.5% instead of the expected 7%, that it will somehow send the rest of the world into a downward spiral. I see this as a “false fear.”
I did some checking of my own.
> Only 20% of the total energy consumption in China is from burning oil (this includes transportation fuels)
> China has just started filling two new strategic petroleum sites
Based on everything I'm seeing, the global market will be much tighter by year-end.