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China’s Economic Data Disappoints and Alibaba Is Down

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Jun. 14 2019, Published 10:57 a.m. ET

Economic data is largely disappointing

China’s National Bureau of Statistics published a host of economic data for May today. Most of the data points disappointed markets, but growth in retail sales offered the one sigh of relief.

Investments in fixed assets grew by 5.6% in May on a year-over-year basis against growth of 6.1% in April. Analysts were expecting steady growth investments in May. The fall in growth in investments was led by primary industries where investment outflow of 2.3% was seen in May.

The industrial production growth dipped to 5% in May compared to 5.4% in April. Analysts were expecting industrial production to continue to grow at 5.4%. The unemployment rate remained steady at 5%. Retail sales grew at 8.6%, faster than the expected 8% and April’s 7.2%.

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Indexes

Although the indexes remained choppy and trended downwards in the first half, the fall accelerated after the lunch break as the economic data was released during the break.

The Shanghai Composite closed a percent down after staying steady yesterday. The index posted 1.92% weekly gains. The Shenzhen component fell even more with a 1.58% fall. The Shenzhen Component posted a 2.62% weekly gain.

ETFs and stocks

The iShares MSCI China ETF (MCHI) gained 0.19% yesterday on NasdaqGM. The ETF was down 0.53% today at 4:28 AM EST in pre-market trade. Alibaba (BABA), which is a part of the ETF, gained 0.18% yesterday but was trading 1.15% lower today in pre-market trading at 7:06 AM EST. Alibaba accounts for 13% of the ETF. Both the ETF and BABA may remain under pressure today when US trading starts.

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