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Chinese landing in doubt

Published Friday, April 11th, 2014

The headline is a tad misleading. Unlike MH370 a landing is not in doubt. What is in doubt is whether it will be soft, fluffy or hard and how far the Chinese authorities will go to try and ensure that it is soft. Trade data released yesterday for March made uncomfortable reading for China bulls. Exports fell by 6.6% year on year and imports by 11.3%. Expectations were for +4% and + 2.4%. The unease will be compounded from overnight figures showing that consumer prices in China fell 0.5% in March.

Technology jitters returned to Wall St after a sell-off saw the tech-heavy Nasdaq shed 3% in its worst single-day drop since 2011. The overwhelming decline in risk appetite came in spite of encouraging US jobless claims which tumbled close to a seven-year low in the latest week.

Both the Dow and S&P were dragged down by more than 1% with European indices falling in tandem after starting strongly following Greece’s triumphant return to bond markets. The recent volatility driven by investor anxiety regarding potential overvaluations looks set to remain as the US 1Q corporate earnings season continues.

To read the rest of the report, please click here 

Posted by David Hufton