IB Net Payout Yields Model

China Watch: Imports Disappoint Causing Market Drops

Interesting how a 22% jump in imports causes the markets to fear a slowdown. Guess it's all about perspective, but seriously all the reports focus on the % of increase versus the raw numbers. Actually can't even find a report that compares the raw numbers though the exports were supposedly a record.

China markets dropped nearly 3% today so it had a huge impact on the markets, but was it really warranted. The markets never seem to under that slower growth is still growth. Slower growth still requires more copper, iron ore, coal, and oil then last year.

- Traders said the weak July import numbers in China dealt a blow to investor confidence because soft demand for inbound goods and services could have negative implications for the global recovery. China's exports grew 38.1% in July from a year earlier, down from June's 43.9% rise, and imports rose 22.7%, slowing from June's 34.1% increase. While imports rose for the ninth consecutive month, the increase was below the 30.2% median increase forecast by economists.

Interesting comments from the Norfolk Southern CEO regarding a continual increase in shipments. Steel making isn't slowing down and coal shipments remain steady. Today's drop and fears about a double dip all seem like major over reactions.

Buy the dip is likely the best course from here. Markets are over reacting to solid growth numbers from China. As usual they sweat the little stuff and miss the big picture.


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