China Manufacturing Turns a Corner (FXI) (CAT)
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After months of slowing, China manufacturing activity rebounded in July, hitting a five month high at 49.5, according to a flash PMI report today by HSBC. The figure was higher than a June number reported at 48.2, but still lower than the critical 50 level, which would indicate expansion.
Central bankers in China have been aggressively fighting to turn the tide in the world's second largest economy, slashing interest rates twice since June in an effort to spur growth. According to today's PMI reading, the government's effort may have already had an effect.
Recent inflation data in China showed moderation, and this will give authorities there plenty of room to move forward with plans for further stimulus. Considering a sharp contraction in the euro zone economy, one of China’s largest trading partners, Beijing is expected to continue pulling levers in a fight to maintain growth.
Traders will be focused on iShares FTSE China 25 Index ETF today (NYSE: FXI). They will also be watching U.S. companies with exposure to China manufacturing, such as Caterpillar Inc. (NYSE: CAT).
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Central bankers in China have been aggressively fighting to turn the tide in the world's second largest economy, slashing interest rates twice since June in an effort to spur growth. According to today's PMI reading, the government's effort may have already had an effect.
Recent inflation data in China showed moderation, and this will give authorities there plenty of room to move forward with plans for further stimulus. Considering a sharp contraction in the euro zone economy, one of China’s largest trading partners, Beijing is expected to continue pulling levers in a fight to maintain growth.
Traders will be focused on iShares FTSE China 25 Index ETF today (NYSE: FXI). They will also be watching U.S. companies with exposure to China manufacturing, such as Caterpillar Inc. (NYSE: CAT).
Join StreetInsider.com FREE and get immediately alerted when news breaks on your stocks and other market items - JOIN NOW
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