The box below is not a Google ad - it's a news headline from CNBC. According to CNBC, the market is up on Alcoa.
|News headline this morning from CNBC|
Well if you are slightly more seasoned than a 25 year old reported for CNBC, you would know that US markets have been driven largely by macroeconomic news lately. And the news last not was from China. The Chinese import growth has slowed, though continues to be robust.
|China import growth (YOY)|
Again to a 25 year old reporter this does not make sense - an import slowdown is a reduction in economic activity. And how could that explain a rally in US equity futures of over 1% before the open?
In fact this is exactly the type of macroeconomic news the markets love. China's imports are not falling off the cliff. The slowdown is visible enough to get the Chinese authorities to pay attention but not drastic enough to derail US growth. In fact Chana's imports of commodities - particularly copper and aluminum - were decent in December.
|China's imports by commodity YOY (Capital Economics)|