China property stimulus is positive, but economic risks persist- Goldman Sachs

Source Investing

Investing.com-- While China’s recent property stimulus measures presented a step in the right direction for the economy, Goldman Sachs (NYSE:GS) analysts warned that risks for the sector still persisted, and that China’s manufacturing sector was seeing signs of oversupply.

GS analysts said the world’s second-largest economy was still on track to meet its 5% gross domestic product target for 2024, amid strong manufacturing and exports, steady household consumption and improving inflation.

But the property market was still “very weak,” and that while the recent government measures for the sector were positive, the sector was nowhere close to seeing an immediate turnaround. 

Beijing announced more loosening in house purchase restrictions through May, and was also seen instructing state governments to begin buying up excess inventory in the housing market.

GS analysts said property market fundamentals still remained weak, and flagged several challenges to Beijing’s execution of its new stimulus measures. They said that new funding measures announced by the government were “nowhere near” what was needed to offset a sustained decline in the market.

Implementations of the inventory shrinking policies also required pricing nuance, while a recovery of the property market also depended largely on household consumption behavior. 

Manufacturing oversupply a growing issue

GS analysts also noted that China’s industrial and manufacturing sector was beginning to see increased signs of oversupply. 

“Across industrial sectors, almost all face rising output and falling prices, a sign of oversupply,” GS analysts said. 

They noted that recent increases in U.S. trade tariffs were likely to have little actual impact on Chinese exports, and that the country’s dominance in global manufacturing and huge trade surpluses were making its trading partners “uneasy.” China’s exports were expected to remain strong in the near-term. 

“Over the medium term, however, as Chinese exports continue to gain market share overseas… we expect Chinese trade surpluses and global trade imbalances will build further, and that trading partners’ pushback will likely intensify,” GS analysts said. 

China's stock markets saw a stellar bounce over the past nearly three months amid cheer over the new stimulus measures. But they fell sharply from 2024 highs in recent sessions, amid creeping doubts over the execution of the policy measures, as well as trade ructions with China.

Disclaimer: For information purposes only. Past performance is not indicative of future results.
placeholder
US October PPI Preview: Fed Rate Hike Expectations Rise, PPI May Be Key Variable; How Will US Stocks, Dollar, and Gold Move?On Friday (Nov. 13) Eastern Time, the U.S. will release the October Producer Price Index (PPI). Following the October CPI once again exceeding expectations, the market will look to the PP
Author  TradingKey
12 hours ago
On Friday (Nov. 13) Eastern Time, the U.S. will release the October Producer Price Index (PPI). Following the October CPI once again exceeding expectations, the market will look to the PP
placeholder
Gold closed below $4,000 again — the ETF crowd and central banks stayed, the momentum money leftSpot gold is trading near $3,999, its third consecutive lower daily low, after a 5.00% 10-year yield and a 102.85 dollar index raised the odds of a December hike to 87%. But the selling is not coming from the strategic holders: managed-money net longs fell to 324 tonnes, a 21-week low, and Goldman Sachs attributes roughly 95% of five weeks of selling to non-reportable positions. ETFs still hold a record 4,256 tonnes and central banks bought 321 tonnes in Q3. The table below sets the triggers, directions and levels.
Author  Irene Q.
17 hours ago
Spot gold is trading near $3,999, its third consecutive lower daily low, after a 5.00% 10-year yield and a 102.85 dollar index raised the odds of a December hike to 87%. But the selling is not coming from the strategic holders: managed-money net longs fell to 324 tonnes, a 21-week low, and Goldman Sachs attributes roughly 95% of five weeks of selling to non-reportable positions. ETFs still hold a record 4,256 tonnes and central banks bought 321 tonnes in Q3. The table below sets the triggers, directions and levels.
placeholder
Nvidia slid 7.7% after hours while AMD and Broadcom rose — the AI trade changed hands, it didn't breakNvidia closed Wednesday at 173.73, up 2.87%, then fell as much as 8.1% to 159.44 after reports that its board was preparing for a possible leadership change. The same session, the Philadelphia Semiconductor Index rose 5.7% with all 30 components higher, CoreWeave jumped 24.7% on 168% revenue growth, and Micron added 11.9%. If AI demand were being repriced, AMD and Broadcom would not be bid. This is a governance discount on one name, and 204.54 — the 200-day average — is the level that settles it.
Author  Irene Q.
18 hours ago
Nvidia closed Wednesday at 173.73, up 2.87%, then fell as much as 8.1% to 159.44 after reports that its board was preparing for a possible leadership change. The same session, the Philadelphia Semiconductor Index rose 5.7% with all 30 components higher, CoreWeave jumped 24.7% on 168% revenue growth, and Micron added 11.9%. If AI demand were being repriced, AMD and Broadcom would not be bid. This is a governance discount on one name, and 204.54 — the 200-day average — is the level that settles it.
placeholder
Gold Extends Slide Below $4,000 as Rising US Inflation, Fed December Hike Bets Pressure Prices On November 12, gold prices (XAUUSD) extended their recent losses, falling further below $4,000 in early Asian trading to hit an intraday low near $3,968, marking a third consecutive day
Author  TradingKey
18 hours ago
On November 12, gold prices (XAUUSD) extended their recent losses, falling further below $4,000 in early Asian trading to hit an intraday low near $3,968, marking a third consecutive day
placeholder
Bitcoin lost its 200-day average — but the exit started three sessions before the CPIBitcoin fell 2.5% to about $73,400 on 11 November, an 11-week low, breaking its 200-day moving average near $73,100. The 24-hour liquidation tally reached $632 to $705 million, roughly 82% of it longs. But spot ETF outflows began three sessions earlier and USDT's market cap has shrunk $6.6 billion in 60 days — the leveraged length left before the inflation print did. A double top at 81,890 and 81,080 leaves a measured target of 69,366.
Author  Suzie
Yesterday 03: 22
Bitcoin fell 2.5% to about $73,400 on 11 November, an 11-week low, breaking its 200-day moving average near $73,100. The 24-hour liquidation tally reached $632 to $705 million, roughly 82% of it longs. But spot ETF outflows began three sessions earlier and USDT's market cap has shrunk $6.6 billion in 60 days — the leveraged length left before the inflation print did. A double top at 81,890 and 81,080 leaves a measured target of 69,366.
goTop
quote