McVEAN
Trading Trading & & Investments, Investments, LLC LLC
CHINA OUTLOOK PHILADELPHIA, PA DECEMBER 13, 2019
Michael Drury Chief Economist McVean Trading and Investments, LLC
Past Performance Is Not Necessarily Indicative Of Future Results.
1
2016 CHINA + HONG KONG EXPORT PIE $2.0 TRILLION
PACIFI C RIM
NORTH
AMERI CA
30%
PAC RIM EUROPE NORTH AMERICA SOUTH ASIA MENA LATIN AMERICA OTHER
EUROPE 24%
22% Past Performance Is Not Necessarily Indicative Of Future Results.
2
2016 US EXPORT PIE $1.5 TRILLION
OTHER 23%
NORTH AMERICA 34% NORTH AMERICA WESTERN EUROPE PACRIM OTHER
PAC RIM 25%
EUROPE 18%
Past Performance Is Not Necessarily Indicative Of Future Results.
3
THIS IS THE TARIFF ROUND CHINA FEARED MOST
YOU START WITH THE LOW HANGING FRUIT SOLAR & WASHING MACHINES
STEEL & ALUMINUM
25% ON $50 B
10% ON $200B
$36B, THEN $14B
25% ON JAN 1
15% MORE ON THE SAME $200B
INDUSTRIAL PARTS & CHEMICALS
CHINA TIT FOR TAT RESPONSE
25% ON $50 B MOSTLY AGRICULTURE
10% TO 25% ON $60 B
5% TO 25% ON ANOTHER $60B
Past Performance Is Not Necessarily Indicative Of Future Results.
4
FURTHER TARIFFS WILL LIFT US PRICES
Past Performance Is Not Necessarily Indicative Of Future Results.
5
THE NEXT $325 B LANDS OUTSIDE CHINA
Past Performance Is Not Necessarily Indicative Of Future Results.
6
CURRENT EXPORTERS OF INDUSTRY PER CAPITA INCOME US Northeast US West Australia US Midwest Northern Europe ex Germany US Resource Germany US South Canada France U.K. Japan Italy South Korea Spain Taiwan Saudi Arabia
70541 67881 56689 56477 56070 56042 48669 48621 46733 42930 42260 40105 34349 32046 31059 25535 23186
POPULATION (MILLIONS) 63948 52704 25088 58673 67459 63631 82439 88340 37279 65481 66959 126855 59217 51339 46441 23758 34141
Past Performance Is Not Necessarily Indicative Of Future Results.
GDP (BILLIONS) 4511.0 3577.6 1422.2 3313.7 3782.5 3566.0 4012.2 4295.2 1742.2 2811.1 2829.7 5087.5 2034.0 1645.2 1442.4 606.7 791.6 7
CURRENT IMPORTERS OF INDUSTRY
Past Performance Is Not Necessarily Indicative Of Future Results.
8
NEXT GENERATION FOR INDUSTRY
Past Performance Is Not Necessarily Indicative Of Future Results.
9
CHINA CREDIT LEADS THE WORLD ECONOMY
2000
CHINA SOCIAL FINANCING VS US & EUROPEAN PMI
60
1750 55 1500
1250
50
1000 45
750
500 40 250
0
35
06 06 06 07 07 08 08 08 09 09 10 10 11 11 11 12 12 13 13 13 14 14 15 15 16 16 16 17 17 18 18 18 19 19 n- un- ov- pr- ep- eb- ul- ec- ay- ct- ar- ug- an- un- ov- pr- ep- eb- ul- ec- ay- ct- ar- ug- an- un- ov- pr- ep- eb- ul- ec- ay- cta J D M O M A J D M O M A J J N A S F J D M O J J N A S F J J N A S F CHINA SOCIAL FINANCING (12 MO AVERAGE) AVERAGE OF EUROPE & US PMI (3MO AVG) Nov-19
Past Performance Is Not Necessarily Indicative Of Future Results.
10
CHINA LEADS THE GLOBAL MANUFACTURING 65
54
China, Eurozone and US PMI 60
52.5
55
51
50
49.5
45
48 Eurozone
US
CHINA
Nov19
Past Performance Is Not Necessarily Indicative Of Future Results.
11
CHINA CAR SALES ARE REBOUNDING (?) 32
30
MONTHLY CHINA CAR SALES SEASONALLY ADJUSTED BY MCVEAN TRADING
28
26
24
22
20
18
16 3 MO AVG
CURRENT MONTH
Past Performance Is Not Necessarily Indicative Of Future Results.
12
REAL ESTATE HELPING BUILD WEALTH
15.0
AVERAGE PRICE FOR NEW RESIDENTIAL BUILDINGS IN CHINA % CH CURRENT MO FROM YR AGO - 70 CITIES
12.5
10.0
7.5
%
5.0
2.5
0.0
-2.5
-5.0
-7.5
Past Performance Is Not Necessarily Indicative Of Future Results.
13
EQUITIES NOT SO MUCH 5000
4500
4000
3500
3000
2500
2000
1500 SHANGHAI COMPOSITE
Nov -19
Past Performance Is Not Necessarily Indicative Of Future Results.
14
CHINESE RAILROAD FREIGHT VS ELECTRICITY PRODUCTION 3 MONTH AVERAGE % CHANGE FROM YEAR AGO 3 MONTH AVERAGE
30.0% 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% -5.0% -10.0% -15.0% -20.0% 6 7 0 0 1 2 3 4 4 5 5 7 8 8 9 9 0 1 1 2 2 3 4 4 5 5 6 6 7 8 8 9 1 2 00 200 200 200 200 200 200 200 200 200 200 200 200 200 200 200 200 200 201 201 201 201 201 201 201 201 201 201 201 201 201 201 201 201 2 / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / 31 31 31 31 31 31 31 29 30 30 30 30 31 31 31 31 31 31 31 2/1 9/1 4/1 1/1 6/1 1/1 8/1 3/1 0/1 5/1 2/1 7/1 2/1 9/1 4/1 1 1/ 8/ 3/ 10/ 5/ 12/ 7/ 2/ 9/ 4/ 11/ 6/ 1/ 8/ 3/ 10/ 5/ 12/ 7/ 1 1 Oct-19 RAIL ELECTRICITY PRODUCTION Past Performance Is Not Necessarily Indicative Of Future Results.
15
CHINA EXPORTS VS IMPORTS
6 MONTH AVERAGE %CH FROM 6 MONTH AVERAGE YEAR AGO 66.0%
49.5%
33.0%
16.5%
0.0%
-16.5%
-33.0% 0 0 1 1 2 2 3 4 4 5 5 6 7 7 8 8 9 9 0 1 1 2 2 3 4 4 5 5 6 6 7 8 8 9 9 -0 g-0 r-0 t-0 y-0 c-0 l-0 b-0 p-0 r-0 v-0 n-0 n-0 g-0 r-0 t-0 y-0 c-0 l-1 b-1 p-1 r-1 v-1 n-1 n-1 g-1 r-1 t-1 y-1 c-1 l-1 b-1 p-1 r-1 v-1 n u u a c p a c a e Ju e e A p o u a u p o a c Ja Au M O Ma De J Fe Se A No Ju Ja Au M O M D F IMPORTS S N J J A M O Ma De J Fe Se A Nov-19 N EXPORTS
Past Performance Is Not Necessarily Indicative Of Future Results.
16
CHINESE PPI IS BOTTOMING
15
CHINA PPI CHANGE FROM SAME MONTH A YEAR AGO
10
5
0
-5
-10
Nov-19 Past Performance Is Not Necessarily Indicative Of Future Results.
17
MANAGING THE FREE FLOATING YUAN CORRUPTION CAMPAIGN CURRENCY BREAK
N
EU CRISIS
UR
CO RE
OOPS
A TR
RE T
RECESSION PRE LEHMAN
RY VE
DE
SCHUMER
Past Performance Is Not Necessarily Indicative Of Future Results.
18
CHINA NOMINAL GDP GROWTH IN US$ CURRENT QUARTER % CHANGE FROM YEAR AGO
36%
32%
28%
24%
20%
16%
12%
8%
4%
0%
Q3 19 Past Performance Is Not Necessarily Indicative Of Future Results.
19
CRUDE OIL 160
140
120
100
80
60
40
20 00 00 01 01 02 02 03 04 04 05 05 06 07 07 08 08 09 09 10 11 11 12 12 13 14 14 15 15 16 16 17 18 18 19 19 20 /20 /20 /20 /20 /20 /20 /20 /20 /20 /20 /20 /20 /20 /20 /20 /20 /20 /20 /20 /20 /20 /20 /20 /20 /20 /20 /20 /20 /20 /20 /20 /20 /20 /20 / 31 31 30 31 31 31 31 27 30 29 30 30 31 31 31 31 29 31 30 28 30 30 30 28 31 29 31 30 31 30 31 28 28 30 29 1/ 8/ 3/ 10/ 5/ 12/ 7/ 2/ 9/ 4/ 11/ 6/ 1/ 8/ 3/ 10/ 5/ 12/ 7/ 2/ 9/ 4/ 11/ 6/ 1/ 8/ 3/ 10/ 5/ 12/ 7/ 2/ 9/ 4/ 11/
Nov 19 Past Performance Is Not Necessarily Indicative Of Future Results.
20
COPPER VS SOYBEANS 450
1800
400
1600
350 1400 300 1200 250 1000 200 800 150
600
100
50
400
Copper
Soybeans
Past Performance Is Not Necessarily Indicative Of Future Results.
Nov-19 21