The April Services PMI showed drops across most indices comprising the headline value
If you want to feel your life is not as bad as it could be, look at the China Services PMI. All indices composing the headline figures slowed down, with the exception of prices charged, just to throw some unwarranted inflation into the mix.
Before the report came out, there was some misplaced hope that perhaps the Services PMI would be stronger than Manufacturing since the Chinese consumer is so resilient. It was a good build up of hope for those holding on to the FXI ETF.
The business activity index took a nose dive from 54.3 in March to 51.1 in April. New business growth decelerated and employment posted a contraction below the 50 point line. The business expectations index was in line with the rest, dropping to the lowest optimism level since the index was started in 2005.
Shoving off the data, FXI keeps increasing amidst hopes that the situation is now so bad that government intervention is imminent and will fix everything quickly and aggressively. There was some weakness observed Friday (May 10th), so perhaps investors are starting to lose hope and realize that bad means bad.
Until the government announces some kind of stimulus, implementation plan and schedule, there is no solid catalyst to justify a move up in the market.