Real estate investment growth
The boom in China’s property market has raised concerns about a bubble, which has prompted authorities to tame property prices through tighter credit and other curbs. These curbs are affecting the market.
In this article, we’ll see what the latest data from China’s property market could mean for iron ore.
China’s property investment growth cooled to 8.4% YoY (year-over-year) in June from 9.8% growth in May, which was slower than April’s 10.2% growth, according to Reuters’ calculations based on data from the National Bureau of Statistics.
Growth in sales and construction starts
In line with the slowdown in real estate investment growth, property sales area growth also depicted a fall in June. Property sales as measured by floor area rose 4.5% YoY, lower than the 8.0% rise recorded in May.
New construction starts as measured by floor area grew 15% in June compared to 20.5% in May.
China’s home prices, on the other hand, remained stable in June. New residential housing prices in first-tier cities increased 0.6% sequentially in June.
Will China’s growth cool off again?
China’s property market (TAO) has shown signs of heating up again in June. Its housing ministry issued two warnings about the current rebound and how it could put curbs in place to rein in home prices. Authorities are trying to maintain a consistent housing policy, and their policy measures seem to be having an effect.
A crackdown by Chinese authorities on the property market could mean a tougher road ahead for iron ore miners. While Vale SA (VALE), the world’s largest iron ore producer, is based in Brazil, BHP (BHP) (BBL), Rio Tinto (RIO), and Fortescue Metals Group (FSUGY) have their major seaborne operations in Australia.
Aggregate financing in China (MCHI) showed an uptick in June but still fell short of expectations.
Broadcom (AVGO) stock fell ~8.5% after markets closed yesterday following the semiconductor giant's fiscal 2019 second-quarter earnings release. It missed analysts' revenue estimate and cut its fiscal 2019 revenue guidance by $2 billion to $22.5 billion due to sluggishness in its semiconductor solutions business.
The SPDR Gold Shares ETF (GLD), which tracks physical gold prices, has underperformed the broader markets year-to-date, rising just 4.4% compared to the S&P 500’s (SPY) gain of 15.9% as of June 14. The sentiment for gold, however, has been turning around.
Safe havens such as Treasuries and gold were back in favor on June 14 as stocks fell due to rising tensions in the Middle East, concerns over growth, and the looming threat of the US-China trade war. The tech-heavy Nasdaq Composite Index fell 0.67% in the first hour of trading.
Lululemon (LULU) stock rose 2.1% on June 13 in reaction to better-than-expected first-quarter results and an upgraded outlook for fiscal 2019 overall. The company's first-quarter adjusted EPS grew 34.5% to $0.74 on revenue growth of 20.4% to $782.32 million. Analysts had expected EPS of $0.70 and revenue of $755.31 million. Here's why the outlook got an upgrade.
As of 4:40 AM Eastern Time today, US crude oil active futures were at $51.83, ~4% below their closing level in the previous week. If US crude oil prices stay at those levels today, they'll mark their third week of decline in five weeks.
Amazon is discontinuing its Amazon Restaurants service, which has been delivering food for restaurants in parts of the United States. Amazon Restaurants launched in the United States in 2015 and entered the British market the following year. However, it met strong opposition in the British market.