Out Fox The $treet

The HSBC Purchasing Manager's Index inched up to 48.7 in December from 47.7 in November. Though still negative it is a number that economists equate with 12-12 percent industrial output. The number has been holding just sub 50 since July so at least the stability is suggestive of a soft landing. Not to mention China has already begun an easing process that should help going forward. Lower inflation followed by low PMIs will allow for quicker policy cuts especially on bank reserves. HSBC Purchasing Manager's Index inched up to 48.7 in December from a 32-month low of 47.7 in November but fell short of the flash reading of 49. HSBC believes a PMI reading of as low as 48 in China still points to annual growth of 12-13 percent in industrial output.  Still, analysts are looking for signs of stabilisation in the factory sector and are anticipating a shift by Beijing to a more supportive economic policy stance to prevent a sharp slowdown.   Chinese stocks have been att...

This is the 3rd in a series or articles focusing on the emerging markets that have come under fire this year. The first 2 articles focused on India and Brazil, while this one will explore the opportunities in China. The main culprit for the emerging market declines has been the supposed rampant inflation. China has been no exception to this fear. Inflation, though, has decidedly peaked in China with the November figure showing month over month declines. This has allowed China to lower bank reserve ratios once already and will likely lead to further cuts especially since the government raised ratios to over 20% at the start of this year. Read the full article at Seeking Alpha. Disclosure: Long CCIH. Please review the disclaimer page for more details. 

Tuesday night, China reported October inflation close to expectations at 5.5%. Though the whisper numbers expected something possibly around 5.3% and could cause a minor market sell-off on Wednesday, the news was wildly bullish. Short term the market always trades off estimates. Long term though, the trading is based on the trend. The trend for inflation in China is clearly downward. Inflation in October eased from the 6.1% annual rate in September with food prices declining 0.2% in the month. Read the full article at Seeking Alpha. Disclosure: Long ANR, FCX, CCIH. Please review the disclaimer page for more details.