China

Inflation: China Is Killing It

Dec 18, 2023 2 min read paid

What have we learned about inflation over the past year? One of the main reasons that the US doesn't need to have a recession to bring down inflation is that China is having the recession for us. China's property bubble has burst, and the deflationary consequences are far greater and more global than those following the bursting of similar bubbles in Japan during the late 1980s

Ed Yardeni

Continue To Underweight Commodities & Emerging Markets In Global Portfolios

Dec 11, 2023 2 min read

The global economy is growing, but at a slow pace. Much of the weakness is attributable to the recessions in China and Europe. US economic growth is slowing from Q3’s rapid pace. Much of the weakness is structural in China but cyclical in the US and Europe. The latter two are likely to grow in 2024, but China will probably remain weak. This implies that commodities and emerging markets

Ed Yardeni

China: The World's Largest Nursing Home

Nov 27, 2023 2 min read

China’s economy is in a property-led and fertility-led depression. That’s bad news for China’s people and for the Chinese Communist Party (CCP) but benefits countries that import Chinese goods at depressed prices. China’s weak economy is good news for the US in particular, helping to moderate goods inflation without a recession here, a.k.a. "immaculate disinflation." It would be in China’s interest

Ed Yardeni

Market Call: Winning Streak For The Bulls

Nov 26, 2023 2 min read paid

We expect that the Santa Claus rally in stock prices that started on October 27 will continue over the rest of this year. It should be driven by the realization that inflation can and is moderating without a recession. That can only happen if productivity growth is making a comeback as we expect. China's economic woes are also an important source of "immaculate disinflation" for the

Ed Yardeni

Oil's Slippery Slope

Nov 7, 2023 2 min read paid

The NYMEX nearby futures price of a barrel of crude oil peaked this year at $93.68 on September 27. Notwithstanding the war that started between Israel and Hamas on October 7, the price is down $16.27 from that peak to $77.42. That’s even though Saudi Arabia and Russia reduced their exports during the summer and maintained their cuts through yearend. One reason for this development is

Ed Yardeni
Eric Wallerstein

Stormy September So Far

Sep 7, 2023 1 min read paid

Good news is bad news again. The stock and bond markets sold off yesterday following better-than-expected readings for August's NM-PMI. In addition, the prices-paid indexes for both the NM-PMI and M-PMI increased in August heightening fears that inflation may have stopped moderating (chart). We disagree since both remain well below last summer's peaks. Today, Q2's revised productivity and costs report showed that hourly compensation

Ed Yardeni

China: Desperately Seeking a New Engine

Aug 16, 2023 2 min read paid

The Chinese are providing American consumers with cheaper goods. By doing so, the Chinese are increasing the purchasing power of American consumers, who are doing what they do best; they are shopping. It’s a gain for the US economy, which is getting better economic growth with lower inflation. It’s a loss for Chinese consumers, who are facing deflation and higher unemployment and dealing with the consequences of the

Ed Yardeni

China Exporting Deflation to US

Aug 8, 2023 1 min read

The US doesn't have to experience a recession to bring inflation down if China's export prices are falling because China is already in a recession. Consider the following: (1) This evening we learned that China's CPI fell 0.3% y/y during July, the first such drop since February 2021. The PPI fell 4.4% over the same period (chart). (2) The CPI inflation

Ed Yardeni

US Disinflation Is Made In China

Jul 13, 2023 2 min read paid

It's not quite the great fall of China. However, something is definitely wrong with China's economy. June's trade data showed that Chinese exports fell sharply for the second month in a row and imports have remained flat since mid-2021 (chart). It was widely expected that the end of the government's pandemic lockdowns late last year would boost economic activity in China and

Ed Yardeni

China's Post-Lockdown Recovery Fizzles

Jun 24, 2023 1 min read paid

Since April, we have been observing that China’s economic recovery over the six months since the government lifted pandemic lockdown restrictions in early December has been surprisingly weak. The country’s total imports have been flat since late 2021 through May of this year (chart). The rallies in the price of copper and in the China MSCI stock price index late last year and early this year have fizzled

Ed Yardeni

China's Post-Lockdown Recovery & Stimulus Disappoint

Jun 8, 2023 2 min read paid

The Chinese government started to lift its pandemic lockdown restrictions in early December last year. The economic rebound has been weaker than widely expected. Indeed, China's imports have been flat at a record high since mid-2021 and have remained so through May of this year (chart). Furthermore, inflation has been nonexistent as the Chinese CPI rose just 0.1% y/y in April, while the country's

Ed Yardeni

What's the Matter with China?

May 23, 2023 2 min read paid

The People’s Bank of China (PBOC) stands out among the major central banks. It is the only one that has been continuing to provide additional monetary policy stimulus. This suggests that China’s economy isn’t performing as well as the government would like to see. The PBOC’s reserve requirement ratio for commercial banks has been lowered three times since the start of 2022. Over the past 12

Ed Yardeni

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