Cold Water...

was found on the details: from the figure of whole-sale trade the de-stocking is still done at the speed greater than re-stocking. Also, while the productivity has improved (a good news), the labour cost is lowered. Directly quoted from bloomberg: "The jump in productivity and drop in unit labor costs were due to hours worked falling much faster than output. Hours worked plunged an annualized 7.6 percent while output edged down 1.7 percent", it is apparent that from the enterprises point of view, they are happy to cut labour cost (by cutting headcount, working hours, lowering wages, or combinations of the above) and for sure will not change readily unless the long-term sales forecast looks more optimisstic.



Another interesting thing to note is that option traders start to bet on the loss of momentum of the rally on S&P500 by September.



At the other end of the Pacific, China's figures, though optimisstic at a glance, did show conflicts. While import, export, trade surplus, CPI and PPI dropped, the PMI and power consumption have greatly increased. While the former ones mean the weakening of economic activities, including domestic (from import and PPI and partially CPI), the latter one suggest an expansion on the activities. Despite the fact that most experts believe in the power consumption figure as a metric stick; nevertheless, coupling with the government spending on you-never-know-go-where-for-what items and on pushing-the-peasants-to-afford-appliances-they-don't-need programs, the actual increase due to "natural" economic reasons is only a minor part of the whole pie.



Now, if China, in order to prevent the potential partial inflation, it may apply measures to cool down both the property market and stock market. The former one is already slowed down or even plateau. The latter one, after the big wave of IPO, will also contract. Therefore, the China investment market may experience some adjustments.



Meanwhile, it may not completely mean nightmare to HK yet. The investment immigration from China, plus other channels, have helped the transfer of RMB asset from China to HK which has further transformed to a substantial force on the HK stock market. Overseas investors and funds will also view it a great opportunity to pick money from their pockets. Ups and downs will be expected, till the point that no more eye-catching IPOs and the immigration wave is seasonally readjusted. By that time the true colors will be shown.