A roundup of what the Globe and Mail's market strategist Scott Barlow is reading this morning on the world wide web.
More weak economic data out of China sets a weaker tone for North American markets this morning. The HSBC Manufacturing PMI survey came in below economists' expectations at 48.1. The sub-50 reading signals a contraction in national manufacturing activity.
Statistics on Chinese property sales are even more alarming. Property sales in Beijing fell more than 18 per cent in year-over-year terms, leading Nomura research to proclaim that "it is no longer a question of 'if' but how severe China's property correction will be."
Declining real estate values will send shock waves throughout the economy because property is used extensively as collateral for new loans. The trend is also important for Canadian investors – a slowing China construction boom means less demand for commodities.
"A whole slew of industries that provide inputs to real estate development, such as steel, white goods, and cement, will suddenly experience a sharp drop in demand as home construction slows" – China Economic Watch
Nobel Prize-winner Robert Shiller calculates that while most North Americans think real estate is a better investment than equities or bonds, houses actually fare poorly over the long term once inflation is taken into account.
Much of the economics discussion over the weekend focused on unemployment rates, specifically how much labour slack there is – on both sides of the border. The consensus is that retiring workers are making the headline statistics look far worse than conditions actually warrant.
Diversion: I played baseball for 15 years and have been watching games my whole life. This is the best catch I've ever seen. With a left-handed hitter the ball is slicing away from the outfielder AND he has to jump like Michael Jordan: – Bleacher Report
Follow Scott Barlow on Twitter at @SBarlow_ROB.