Charting the Markets: The China Glass is Half Full
Global stocks rebounded from the longest stretch of losses in six weeks as data from China provided evidence of a re-balancing of the world's second biggest economy. Industrial output last month missed expectations, matching the weakest gain since 2008, and fixed-asset investment increased at the slowest pace since 2000 in the first 10 months of the year. However, retail sales jumped 11 percent in October, the biggest gain of 2015. The shift to consumer spending from old growth drivers like manufacturing is encouraging, even though the economy is still sputtering. According to Bloomberg's monthly gross domestic product tracker China grew 6.57 percent in October, signaling more stimulus is needed.
The industrial metals sell-off continues, prompted by China's weakest production figures since the financial crisis. Output rose 5.6 percent in October from a year earlier, matching March's figure (which itself was the worst reading since 2008). Copper, zinc and nickel are heading for their lowest close in at least six years as slowing growth in China dents demand from the world's largest consumer of energy, metals and grains. The London Metal Exchange index of six industrial metals is set for a third consecutive annual drop, the worst streak since at least 2001. The gauge has sunk 23 percent this year.
The New Zealand dollar rose against all 16 of its major peers after the central bank warned Auckland's soaring housing market posed a risk to the country's financial system. In its semi-annual Financial Stability report, the Reserve Bank of New Zealand said Auckland "was at risk of a damaging correction, especially if economic conditions deteriorate." Governor Graeme Wheeler faces a tricky dilemma as he tries to buffer a slump in milk prices which has curbed economic growth. He's cut the official cash rate three times this year. Any further moves may further stoke demand in Auckland. The kiwi has sunk 16 percent against its U.S. counterpart this year.
Third time lucky. After two extensions by British regulators to formalize its bid for SABMiller, ABInbev finally announced a $107 billion deal, nine hours ahead of a 5 p.m. deadline. The £44 per share offer is the brewing industry's biggest-ever deal and brings together brands such as Peroni and Grolsch. To appease regulators, MolsonCoors Brewing is buying SABMiller's 58 percent stake in their MillerCoors joint venture, for $12 billion. The cash offer is 50 percent above the closing value on Sept.14, the day before takeover speculation surfaced. The shares still trade below the offer price, highlighting doubts about the completion of the deal.
Mark Barton is a presenter on Bloomberg TV. Follow him on Twitter @markbartontv