China’s continued to steal the market headlines on Wednesday after data revealed that factory activity continues its slowing pace in November as surging COVID-19 cases spread across the country.
Additionally, the Chinese city of Zhengzhou has said it will be easing back on restrictions. This helped markets somewhat as this city has the largest Apple factory in the country.
Energy markets were mixed on the news, however, Chinese stocks did not like the latest data from the Chinese economy. Official data also showed air traffic down 35 percent on the year.
Breaking down the numbers, the purchasing managers’ index (PMI) for China’s manufacturing sector edged down to 48 in November, according to the National Bureau of Statistics.
Both the demand and production slowed down as in November the pandemic had a negative impact on the production and operation of some enterprises.
Small and medium-sized enterprises were under more severe pressure. The PMI for small companies dropped 2.6 percentage points from October to 45.6.
Despite the headwinds, some sectors-maintained expansion, including agricultural food processing, medicine and electrical machinery equipment, according to Zhao.
The PMI for non-manufacturing sector came in at 46.7 in November, also down from 48.7 in October. A reading above 50 indicates expansion in activities, while a reading below reflects contraction.
The latest data came after October 49.2, marking a technical recession and underscores the economic hardship the economy is underway, and why the lockdowns in China are severely hampering growth.
Eurozone inflation readings are the next big data point the market is watching today. I would suggest keeping a close watch out for core inflation readings.
