China’s gross domestic product rose 7.3% in Q3 2014 quarter from Q3 2013, the slowest growth since Q1 2009. This exceeded economists’ expectations of a 7.2% rise.
“Decent exports and the fact that there is more to China’s domestic demand than real estate dampen the overall slowdown. Barring a major further slowdown we expect the policy stance to remain relatively restrained.”
Louis Kuijs, Chief Greater China Economist, Royal Bank of Scotland Group Plc (HK) More
“The weakest part of China’s economy is still the property sector. The government has relaxed some controls recently and property sales may pick up in the fourth quarter. However, we may not see improvement in sectors like heavy industry and we expect the economy to continue to slow down.”
Wang Tao, Analyst, UBS (HK) More
“It’s hard to square the GDP print with the industrial production numbers for the quarter. There are confusing things going on. You have credit growing at the slowest pace since 2002. You have real estate investment slowing on a monthly basis and you have industrial production averaging slightly above 8 percent on a quarterly basis, slightly down from Q2. With that being the most reliable component of GDP on a quarterly basis, 7.3 percent seems a bit high to me.”
Andrew Polk, Economist, the Conference Board (Beijing) More
“The government has reiterated that no broad stimulus will be implemented, and I think today’s data will further bolster and strengthen that trend”
Zhu Haibin, Chief China Economist, JPMorgan Chase & Co. (HK) More
US producer price index – Sep 2014
“The Producer Price Index for final demand decreased 0.1 percent in September, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. Final demand prices were unchanged in August and advanced 0.1 percent in July. On an unadjusted basis, the index for final demand increased 1.6 percent for the 12 months ended in September.
In September, the 0.1-percent decrease in final demand prices can be traced to the indexes for both goods and services, which moved down 0.2 percent and 0.1 percent, respectively.
Within intermediate demand, prices for processed goods inched up 0.1 percent, the index for unprocessed goods rose 0.6 percent, and prices for services were unchanged.”
Bureau of Labor Statistics, “US producer price index – Sep 2014“, 21 Oct 2014 (08:30) More
Existing home sales – Sep 2014
Sales of previously owned U.S. homes advanced 2.4 percent in September to a 5.17 million annual rate, the National Association of Realtors reported today in Washington. A gain of 1 percent was forecast in a Bloomberg News survey of economists. More
“After a modest decline last month, existing-home sales bounced back in September to their highest annual pace of the year, according to the National Association of Realtors®. All major regions except for the Midwest experienced gains in September.
Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, increased 2.4 percent to a seasonally adjusted annual rate of 5.17 million in September from 5.05 million in August. Sales are now at their highest pace of 2014, but still remain 1.7 percent below the 5.26 million-unit level from last September.
The median existing-home price for all housing types in September was $209,700, which is 5.6 percent above September 2013. This marks the 31st consecutive month of year-over-year price gains.
Total housing inventory at the end of September fell 1.3 percent to 2.30 million existing homes available for sale, which represents a 5.3-month supply at the current sales pace. Despite fewer homes for sale in September, unsold inventory is still 6.0 percent higher than a year ago, when there were 2.17 million existing homes available for sale.
All-cash sales were 24 percent of transactions in September, up slightly from August (23 percent) but down from 33 percent in September of last year. Individual investors, who account for many cash sales, purchased 14 percent of homes in September, up from 12 percent last month but below September 2013 (19 percent). Sixty-three percent of investors paid cash in September. ”
National Association of Realtors, “Existing home sales – Sep 2014“, 21 Oct 2014 (10:00am) More
“We’re on a pretty stable trajectory. Borrowing costs are pretty contained. The rate of payroll growth is a modest positive for the housing market.”
Guy LeBas, Managing Director, Janney Montgomery Scott LLC More
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The shape of the day
“Now we can finally focus on earnings in the U.S. Apple’s numbers were stunning, so that should help markets. So far, earnings numbers look OK.”
Kully Samra, Charles Schwab Corp. (UK) ($2.4 trillion) More
“This was strong across all sectors, and Apple gave a good guidance. Any fund manager who is underweight on Apple is probably rethinking that position today.
Michael Binger, Senior Portfolio Manager, Gradient Investments More
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VMware Q3 2014 earnings More
VMW’s Q3 revenue was $1,52bn, just above expectations of $1.5bn. EPS were $0.87, ahead of expectations $0.83. However analysts were concerned about a fall in profit margin from 22% of sales to 16% of sales in Q3 2014. In after hours trading VMW dropped 1.32% to $86.50.
“VMware, Inc. (NYSE: VMW), the global leader in virtualization and cloud infrastructure, today announced financial results for the third quarter of 2014:
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