Dow Set to Open Down as Bessent Shrugs Off Market Decline
China’s stronger-than-anticipated economic data belies serious underlying issues, Nomura analysts said.
On-year growth in industrial production, FAI, and retail sales for Jan-Feb were above consensus. That supports their forecast of 5.0% on-year GDP growth for 1Q, but a decline in IP and retail sales is likely coming.
They cite payback from the goods trade-in programs that have boosted retail sales since September, and from export front-loading that’s lifted IP growth.
They see 4Q headline GDP growth falling to 4.0% due to the paybacks, property decline, tariffs, and U.S.-China tensions.
The property sector is especially concerning as key data are negative across the board. “Without a real stabilization of the property sector there will be no real recovery of the Chinese economy,” they said.