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For the better part of the last three months, the bears have been stuck with a thesis we were flashing them 9-12 months ago – that China is “slowing”…

Well, like all great stories, there is an ending… and then, a new narrative finds new beginnings. This morning’s Chinese PMI accelerating sequentially (see chart) may not be a huge move on a nominal basis, but the point is that on the margin, the move was finally higher. Since the month of November couldn’t have been worse in terms of global trade, December was bound to be better than toxic – and it was…

Everything that matters most in our macro models occurs here – on the margin. This data point is now old news, and surely one that the China bears will have a tough time getting “unstuck” in their models; that’s if they have them, of course…

We remain long both China and Hong Kong via the FXI and EWH etfs.

Keith R. McCullough
CEO & Chief Investment Officer