What's up with China? Another 1.7 percent decline in the Shanghai Index , to the lowest level since March 2009, just about the worst performing large stock market in the world.
The Chinese have cut rates twice recently and banks are being ordered to lend more, but investors don't seem to have confidence that these are going to have a big impact. Will they open the floodgates for another round of massive infrastructure spending, like they did in 2008?
Chinese Premier Wen Jiabao said that the nation's recovery has yet to build up momentum.
1) Not a good trend: Retail sales for June were much weaker than expected, down 0.5 percent, consensus was for up 0.2 percent. They were no better excluding autos — down 0.4 percent, consensus was up 0.1 percent. We have now had negative retail sales for three consecutive months, the weakest numbers since May 2010.
Gasoline sales were down 1.8 percent month-over-month, thanks to lower prices. That savings should go into consumer pockets and be spent elsewhere, but it didn't seem like that happened. Consumer appear more cautious.
If this cautiousness continues, the back-to-school season now beginning will be soft. Retailers will have to be heavily promotional, which will put pressure on margins and earnings.Page 1 of 3 | Next Page