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Takeaway: The indicators in China look less than rosy.

In case you missed it, the HSBC China manufacturing PMI just came out showing a decline below 50. Not good.

The last time it dipped below this threshold was back in August. (A reading above 50 typically signals expansion, below 50 signals contraction).

Beware of Chinese Tea Leaves - 90

On a related note, here’s an eye-catching chart from Hedgeye Industrials analyst Jay Van Sciver revealing weakness in Chinese construction materials prices.

Again, not good.

Beware of Chinese Tea Leaves - rebar1

Van Sciver highlights falling inflation-adjusted average rebar prices (that metal rod used to reinforce cement) as an additional sign that fixed asset investment growth in China may be slowing.

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