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Chinese official manufacturing survey drops
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China's official manufacturing PMI is, in deed, the only report off of China that is to be trusted off of China. HSBC's PMI, on the other hand, should be totally ignored. HSBC clearly manipulates its figures in line with its trading desk positions. China's official manufacturing PMI actually beat market expectation as market participants traded factoring in whisper numbers for China official PMI in the range of 48.7 to 49.9, for an average expectation 49.3
The reported PMI of 50.5, therefore, beat the whisper number of 49.3 by a wide margin. Translation: Market will gap up on Monday morning and by the end of the week S&P may very well hit another record high as shorts will scramble to cover their positions.
Case in point, HSBC's PMI numbers crashed the future's market (ES, NQ) overnight on January 23rd and investors in the US woke to an S&P which broke its 50 day moving average, hence the volatility for the last 6 trading sessions.
Experienced traders ignore ADP's employment report and rather pay attention to the U.S. Bureau of Labor Statistics “unemployment situation” report.
Going forward, much like the ADP report, HSBC's PMI report should be ignored.
Feb 2, 2014. 12:51 PM
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