Tuesday, 31 December 2013

Stocks in US and Japan see best gains in decades but workers' fortunes lag

The Dow Jones Industrial Average rose 0.2 percent on Monday to close at another all-time high. It has now risen 26 percent this year, which would be its biggest gain since 1996.

The S&P 500 has risen 29 percent this year, which would be its biggest gain since 1997.

The gains in the US stock market, however, are eclipsed by those in Japan. The Nikkei 225 rose 0.7 percent to close the year with a 57 percent gain, the most since 1972.

The rise in Japanese stocks have been fuelled by a fall in the yen, which has lost 21 percent against the US dollar this year, its biggest drop since 1979.

The fall in the yen is helping to push up inflation in Japan. Unfortunately, wages are not expected to keep up with consumer prices. A poll of 16 economists by Bloomberg showed that labor cash earnings are expected to increase 0.6 percent in the year starting 1 April while another Bloomberg survey showed that consumer prices are forecast to climb five times faster at 3 percent.

The US worker may not be much better off. A Bloomberg report on Monday said that rising income inequality is starting to hit home for many American households.

As the gap between the rich and poor widened over the last three decades, families at the bottom found ways to deal with the squeeze on earnings. Housewives joined the workforce. Husbands took second jobs and labored longer hours. Homeowners tapped into the rising value of their properties to borrow money to spend.

Those strategies finally may have run their course as women’s participation in the labor force has peaked and the bursting of the house-price bubble has left many Americans underwater on their mortgages.

“We’ve exhausted our coping mechanisms,” said Alan Krueger, an economics professor at Princeton University in New Jersey and former chairman of President Barack Obama’s Council of Economic Advisers. “They weren’t sustainable.”

Still, the US housing market may be steadying after some recent weakness. The National Association of Realtors reported on Monday that pending home sales in the US rose 0.2 percent in November, the first gain in six months and after having fallen 1.2 percent in October.

“We may have reached a cyclical low because the positive fundamentals of job creation and household formation are likely to foster a fairly stable level of contract activity in 2014,” NAR chief economist Lawrence Yun said in a statement.

The outlook for housing in the UK also appears positive. A report from Hometrack on Monday showed that house prices in England and Wales rose 0.5 percent in December. The mismatch between supply and demand that helped to drive prices higher this year will persist in 2014, according to Hometrack.

While rising stock and house prices have raised fears of bubbles, it is ballooning government debt that may be the real threat to economies, not least in China.

The National Audit Office reported on Monday that the results of a debt audit showed that liabilities carried by local governments in China surged to 17.9 trillion yuan as at the end of June, up 67 percent from the end of 2010.

Friday, 27 December 2013

Japanese inflation at 5-year high, factory output and retail sales rise

Japanese economic data on Friday were generally positive.

Consumer prices excluding fresh food rose 1.2 percent in November from a year earlier, the fastest rate of increase since October 2008.

Factory production rose 0.1 percent in November, and manufacturers surveyed by the government expect production to rise further in December and January.

Indeed, the manufacturing PMI from Nomura and JMMA rose to 55.2 in December, the highest since July 2006, from 55.1 in November.

Retail sales rose 4.0 percent in November from a year earlier even as household spending rose just 0.2 percent.

The unemployment rate for November was 4.0 percent, unchanged from the previous month.

Thursday, 26 December 2013

US durable goods orders jump, new home sales near 5-year high

There were no major economic data on Wednesday but on Tuesday, US economic data had brought some cheer for the festive season.

Durable goods orders jumped 3.5 percent in November. Non-defense capital goods orders excluding aircraft surged 4.5 percent, the largest increase since January, and snapped two consecutive months of declines.

Another report on Tuesday showed that new home sales fell 2.1 percent in November. However, October's sales were revised to show a 17.6 percent surge to the highest level since July 2008.

Tuesday, 24 December 2013

US stocks hit record as growth rises above trend

Global stocks rose to the highest level in almost six years on Monday. The MSCI All-Country World Index rose 0.6 percent while the S&P 500 rose 0.5 percent to close at another record high.

US economic data on Monday were positive.

The Chicago Federal Reserve's national activity index rose to +0.60 in November from -0.07 in October. The three-month moving average rose to +0.25 in November, the highest reading since February 2012, from +0.12 in October. According to the Chicago Fed, the three-month average showed that economic growth was above historical trend.

US economic growth in November was helped by increased consumer spending. Consumer spending rose 0.5 percent in November as income rose 0.2 percent. With the price index based on consumer spending unchanged last month, growth in real consumer spending was the highest since February 2012.

In another sign of an improving consumer outlook, the Thomson Reuters/University of Michigan's index of consumer sentiment jumped to 82.5 this month, unchanged from the preliminary reading and the highest since July, from 75.1 in November.

The improving US economy has been acknowledged by the International Monetary Fund. Speaking on NBC's “Meet the Press”, IMF Managing Director Christine Lagarde said that with more certainty for 2014 on the budget and monetary policy, and good numbers showing that growth is picking up and employing going down, she sees “a much stronger outlook for 2014, which brings us to raising our forecast”.

Saturday, 21 December 2013

US and UK growth revised up, eurozone consumer confidence improves, BoJ policy unchanged

Economic data on Friday were positive.

In the US, third quarter growth was revised up to a 4.1 percent annualised rate from a previous estimate of 3.6 percent. The latest estimate is the strongest growth rate since the last three months of 2011.

In the UK, third quarter growth was confirmed at 0.8 percent but growth in earlier quarters was revised up, resulting in year-on-year growth being raised to 1.9 percent from an earlier estimate of 1.5 percent.

In the euro area, the European Commission's consumer confidence index improved to -13.6 in December from -15.4 in November.

In Germany, consumer confidence hit its highest level in nearly 6-1/2 years. GfK's consumer confidence index for January came in at 7.6, rising from 7.4 the previous month.

And in Japan, the Bank of Japan introduced no fresh measures to stimulate the economy at its monetary policy meeting on Friday, saying that the economy was “recovering moderately” while efforts to stoke inflation were taking hold.

Friday, 20 December 2013

US leading index rises, existing home sales fall

The Federal Reserve's decision to taper its bond purchases on Wednesday gained further support from data from the Conference Board on Thursday showing that the latter's index of US leading economic indicators rose 0.8 percent in November, indicating that the US economy is likely to continue growing.

However, other data from the US on Thursday showed that existing home sales fell 4.3 percent in November and initial claims for unemployment benefits rose 10,000 to 379,000 last week, the most since the end of March.

US stocks were little changed on Thursday. The S&P 500 fell 0.1 percent but the Dow Jones Industrial Average rose 0.1 percent.

Elsewhere, a report on Thursday showed that UK retail sales rose 0.3 percent in November after having fallen 0.9 percent in October. However, a survey from GfK showed that its UK consumer confidence index fell to -13 in December from -12 in November.

Thursday, 19 December 2013

Fed trims QE, stocks jump

The Federal Reserve decided to trim the pace of its bond purchases at its monetary policy meeting on Wednesday. Bloomberg reports:

The Federal Reserve is trimming its monthly bond purchases to $75 billion from $85 billion, taking the first step toward unwinding the unprecedented stimulus that Chairman Ben S. Bernanke put in place to help the economy recover from the worst recession since the 1930s.

“Reflecting cumulative progress and an improved outlook for the job market, the committee decided today to modestly reduce the monthly pace at which it is adding to the longer-term securities on its balance sheet,” Bernanke said at a press conference in Washington today after a meeting of the Federal Open Market Committee.

The decision had apparently been more than priced into markets. Stocks rose, with the S&P 500 rising by 1.7 percent on Wednesday.

The Fed decision was supported by US economic data on Wednesday. Housing starts jumped 22.7 percent in November to the most since February 2008.

There were also positive data from Europe. In Germany, the Ifo business climate index rose to 109.5 in December from 109.3 in November. In the UK, the unemployment rate fell to 7.4 percent in the three months to October from 7.6 percent a month earlier.

However, earlier in the day, Japan reported a record November trade deficit. Exports rose 18.4 percent from a year earlier while imports rose 21.1 percent, resulting in a 35.1 percent increase in the trade deficit.

Wednesday, 18 December 2013

Consumer prices unchanged in US, fall in euro area, housing markets show strength

A report on Tuesday showed that US consumer prices were flat in November after having fallen 0.1 percent in October. That helped push the annual inflation rate to 1.2 percent last month from 1.0 percent in the previous month, which had been the smallest increase since October 2009.

Another report from the US on Tuesday showed that the NAHB/Wells Fargo housing market index rose to 58 from 54 in November.

A report from the euro area on Tuesday showed that consumer prices there fell 0.1 in November. That kept the annual inflation rate at 0.9 percent after it had fallen below 1 percent to 0.7 percent for the first time since February 2010 in October.

In the UK, inflation fell to 2.1 percent in November, the lowest since November 2009, from 2.2 percent in October.

Even as UK consumer price inflation slowed, house price inflation has proven more persistent. House prices across Britain rose by 5.5 percent in the 12 months to October, the fastest increase since September 2010.

Apparently, maintaining moderate consumer price inflation is more important than restraining asset prices in the minds of central banks.

Sweden's Riksbank cut its repo rate by 25 basis points to 0.75 percent on Tuesday as it said that inflation was likely to be much lower in the year ahead than it had anticipated in recent forecasts even as it now expected bigger increases in house prices and debt than it had forecast in October.

Tuesday, 17 December 2013

Global manufacturing grows, Japanese business confidence hits 6-year high

Growth in China's manufacturing activity slowed in December, according to a report on Monday. HSBC's preliminary manufacturing PMI for China came in at 50.5 for the month, down from 50.8 in November but still indicating expansion.

Other economic data on Monday were more positive.

In the euro area, Markit's flash composite PMI rose to 52.1 in December from 51.7 last month. The manufacturing PMI rose to 52.7 from 51.6 but the services PMI dipped to 51.0 from 51.2.

In the US, industrial production jumped 1.1 percent in November as manufacturing production rose 0.6 percent. US manufacturing probably continued to expand in December, with Markit's preliminary manufacturing PMI coming in at 54.4 after hitting a 10-month high of 54.7 in November.

In Japan, the Bank of Japan's quarterly Tankan survey showed that its index for large manufacturers rose to plus 16 in December, the highest since December 2007, from plus 12 in September. The non-manufacturers' index jumped to plus 20 from plus 14, the best reading in more than six years.

Monday, 16 December 2013

Stocks: Maybe no bubble, but corporate earnings could fall

Dean Baker is among those who had warned of a potential stock market crash back in 1999. However, he thinks that there is no bubble in stocks at the moment.

If we go...back to the bubble days of 2000, we had a peak S&P of roughly 1500... [T]he S&P would be a bit over 2430 if it were as high relative to potential GDP today as it was at the peak of the 1990s stock bubble.

Another way to put this is that, relative to the potential of the economy, the stock market is about 68 percent of its bubble peak. Would this mean we have a bubble now? By my assessment the answer is no. The PEs at the peak in 2000 were above 30 to 1 (using trend earnings, defined as the average share of profits in GDP). That was more than double the historical average. The current ratio would put the PEs around 20. This is still well above the historical average, but not obviously in bubble territory.

However, John Hussman says that, based on historical episodes of mean reversion, corporate earnings are likely to fall.

At present, the extreme profit/GDP ratio we observe here is consistent with expectations of a 22% annual contraction in profits over the coming 4-year period – which would imply a roughly 63% cumulative contraction in profits from present levels. My impression is that’s probably too aggressive an expectation except as a temporary trough. A more reasonable expectation, in my view, would put corporate profits down about 10% annually over the next few years.

A fall in earnings would put pressure on stock valuations and future stock returns.

The problem is not simply that earnings are likely to retreat deeply over the next few years. Rather, the problem is that investors have embedded the assumption of permanently elevated profit margins into stock prices, leaving the market about 80-100% above levels that would provide investors with historically adequate long-term returns. An equivalent way to say this is that stocks are currently at levels that we estimate will provide roughly zero nominal total returns over the next 7-10 years, with historically adequate long-term returns thereafter.

Friday, 13 December 2013

Stocks fall on mixed economic data and conflicting valuation indicators

US stocks fell for a third day on Thursday, sending the S&P 500 down 0.4 percent to a one-month low.

Stocks fell as a report on Thursday showed that US retail sales rose 0.7 percent in November, raising the probability of the Federal Reserve reducing monetary stimulus soon.

European stocks also fell for a third day. The STOXX Europe 600 fell 1.0 percent on Thursday to a two-month low.

Unlike the US, the declines in stocks in Europe were accompanied by negative economic data. Industrial production in the euro area fell 1.1 percent in October, the steepest monthly decline in more than a year.

Apparently, the prospect of a reduction in monetary stimulus from the Fed outweighed the prospect for further easing from the European Central Bank.

Or perhaps stocks are just overvalued. Zero Hedge notes that at the moment, “Tobin's Q (a valuation indicator based on market 'price' versus 'asset value' for non-financial companies) has only been higher at the peak of bubble exuberance”.

On the other hand, Joshua Brown notes that according to Savita Subramanian at Bank of America Merrill Lynch, out of 15 valuation metrics that they looked at, “12 of the 15 metrics suggest the S&P 500 is trading below historical average levels... Only the Shiller P/E...suggests the market looks very stretched”.

Thursday, 12 December 2013

Stocks fall, China loans rise

Stocks lost further momentum on Wednesday.

In the US, the S&P 500 fell 1.1 percent, its second consecutive decline. The STOXX Europe 600 also declined for the second consecutive day, falling 0.5 percent on Wednesday.

The MSCI Asia Pacific Index fell 0.6 percent on Wednesday with China’s Shanghai Composite Index in particular falling 1.5 percent.

Chinese stocks fell despite data on Wednesday showing that credit growth in China accelerated in November.

The People's Bank of China reported that banks made 624.6 billion yuan of new local-currency loans in November, well above the previous month's 506.1 billion yuan.

Total social financing aggregate, a broad measure of liquidity in the economy, jumped to 1.23 trillion yuan in November from 856.4 billion yuan in October.

M2 money supply rose 14.2 percent last month from a year earlier.

Wednesday, 11 December 2013

Japanese machinery orders rebound, Chinese industrial production slows

Data on Wednesday showed that Japan's core machinery orders rebounded slightly in October, rising 0.6 percent after having fallen 2.1 percent in September.

Data on Tuesday had shown that Japanese consumer confidence also rebounded slightly in November, with the Cabinet Office's index rising 1.3 points to 42.5 after having fallen 4.2 points in October.

However, another report on Tuesday showed that confidence among Japan's large companies weakened in the fourth quarter. A survey conducted by the Ministry of Finance and the Cabinet Office showed that the sentiment index for large firms fell to 8.3 points from 12 points in the third quarter.

There were also mixed data from China on Tuesday. Industrial production rose 10.0 percent in November from a year ago, down from the 10.3 percent increase in October. Fixed asset investment increased 19.9 percent year-on-year in the first 11 months of this year, down from an increase of 20.1 percent for the first 10 months.

However, retail sales rose 13.7 percent in November from a year ago, better than the 13.3 percent increase in October.

In Europe, data on Tuesday showed that the UK economy maintained momentum in October. Industrial production rose 0.4 percent in October while the trade deficit narrowed.

Tuesday, 10 December 2013

Stocks rise, global economic outlook improves

Stocks rose on Monday. The S&P 500 rose 0.2 percent to a new record high. The STOXX Europe 600 also rose 0.2 percent while the MSCI Asia Pacific Index gained 0.8 percent.

Stocks rose as the Organisation for Economic Cooperation and Development said on Monday that the outlook for most major economies has improved. Its composite leading indicator rose to 100.7 in October from 100.6 in September.

The OECD noted that growth in the euro area has returned to its long-term trend rate, with the region's composite leading indicator rising to 100.9 in October from 100.7 in September. The reading for the US was unchanged at 100.8 while the reading for Japan rose to 101.3 from 101.1.

Economic data from Japan on Monday were mixed though.

Japan's third quarter growth was revised down to 0.3 percent from 0.5 percent after second quarter growth of 0.9 percent and the current account fell back into deficit in October.

However, the Cabinet Office's economy watchers survey showed that its current conditions index rose to 53.5 in November from 51.8 in October. The future conditions index rose to 54.8 from 54.5.

Data from Germany on Monday were also mixed. Industrial production fell 1.2 percent in October after having fallen 0.7 percent in September. However, exports rose 0.2 percent in October while imports rose 2.9 percent.

Meanwhile, China's inflation continued to cool in November. The inflation rate fell to 3.0 percent in November from 3.2 percent in October.

Monday, 9 December 2013

Acceleration in US growth pulls up global economy

The global economy accelerated in November, thanks to the United States.

A report published by Markit Economics last week based on surveys of purchasing managers around the world showed that the JPMorgan global all-industry output index rose to 54.3 in November from 52.1 in October.

According to Markit, the main driving factors behind the rise in the output index were strong rebounds in the rates of expansion in the US services and manufacturing sectors, which sent Markit's US composite output index to 56.2 in November from 49.6 in October after a sharp decline in October.

Corroborating the signals from the purchasing managers surveys, a report from the Labor Department on Friday showed that US nonfarm payrolls increased by 203,000 in November, the biggest rise in three months. The gains in employment brought the unemployment rate down to 7.0 percent from 7.3 percent in October.

Also on Friday, the preliminary reading of the Thomson Reuters/University of Michigan consumer sentiment index for December came out at 82.5, well up from 75.1 in November.

Elsewhere, growth also accelerated in China. Markit reported last week that the HSBC composite output index for China rose to 52.3 in November from 51.8 in October.

And on Sunday, China's General Administration of Customs reported that exports rose 12.7 percent in November from a year earlier, well up from a 5.6 percent increase in October. Growth in imports slowed though to 5.3 percent from 7.6 percent.

Growth was more subdued in November in the other major developed economies though. In the euro area, Markit's composite output index fell to 51.7 in November from 51.9 in October, while in Japan, Markit's composite output index fell to 54.0 from 56.0.

Saturday, 7 December 2013

US stocks rise as unemployment falls

US stocks jumped on Friday to end a five-day losing streak. The S&P 500 rose 1.1 percent to end the week flat.

Stocks rose despite a strong employment report on Friday that raised the probability of the Federal Reserve reducing monetary stimulus. The Labor Department reported that the unemployment rate fell to a five-year low of 7.0 percent in November from 7.3 percent in October as nonfarm payrolls increased by 203,000.

Adding to the positive data on Friday, the preliminary reading of the Thomson Reuters/University of Michigan consumer sentiment index for December came in at 82.5, well up from 75.1 in November, after consumer spending had risen by 0.3 percent in October.

However, not all data on Friday pointed to a likelihood of a reduction of monetary stimulus. Personal income fell 0.1 percent in October, the first decline since January, after rising 0.5 percent in September, while consumer prices were unchanged.

Elsewhere in the world, Japan's economic recovery looks like it is maintaining momentum after a report on Friday showed that its index of coincident economic indicators rose 1.2 points in October and its index of leading economic indicators rose 0.7 point.

However, in Germany, a report on Friday showed that factory orders fell 2.2 percent in October after rising 3.1 percent in September.

Friday, 6 December 2013

US growth revised up, Europe leaves monetary policies unchanged, Japan raises fiscal stimulus

A report on Thursday showed that the US economy grew significantly stronger than initially estimated in the third quarter. Gross domestic product rose at a 3.6 percent annual rate, up from an initial estimate of 2.8 percent and the strongest since the first quarter of 2012.

However, almost half of the increase in the growth rate came from an increase in the estimate of inventory accumulation, which could result in lower growth in the fourth quarter.

Also, another report on Thursday showed that US factory orders fell 0.9 percent in October after rising 1.8 percent in September.

In any case, US stocks fell on Thursday, the S&P 500 falling 0.4 percent.

European stocks also fell. The STOXX Europe 600 declined 0.9 percent as both the European Central Bank and the Bank of England left their monetary policies unchanged on Thursday.

Meanwhile, though, the Japanese government did approve a stimulus package worth 5.5 trillion yen on Thursday in a bid to offset the impact of a tax hike that comes into effect next year.

Thursday, 5 December 2013

US economy drives global output up

Economic data on Wednesday were mostly positive.

JPMorgan's global all-industry output index rose to 54.3 in November from 52.1 in October. According to JPMorgan, the US was the brightest spot in the global economy.

Indeed, the Federal Reserve reported in its Beige Book that the economy grew at a “modest to moderate pace” in October and early November and US economic data on Wednesday were mostly positive.

While the Institute for Supply Management's non-manufacturing index fell to 53.9 in November from 55.4 in October, ADP reported that private employers added 215,000 new jobs last month. New home sales jumped 25.4 percent in October after falling 6.6 percent in September and the trade deficit shrank in October after exports hit an all-time high.

In the euro area, third quarter growth was confirmed at 0.1 percent, which was down from 0.3 percent in the previous quarter.

The fourth quarter may also have started weakly as another report showed that eurozone retail sales fell 0.2 percent in October. Also, Markit's eurozone composite PMI fell to 51.7 in November from 51.9 in October as the services index fell to 51.2 from 51.6.

The UK services sector also slowed in November. However, at 60.0, it remained near its 16-year high of 62.5 in October.

China's services sector growth also maintained momentum in November. The HSBC/Markit services PMI fell slightly to 52.5 from 52.6 in October.

Wednesday, 4 December 2013

China services and UK construction expand, stocks fall again

China's economy showed further signs of resilience on Tuesday. Data from the National Bureau of Statistics showed that the official PMI for the non-manufacturing sector fell to 56.0 in November from 56.3 in October, indicating continued expansion.

It is the UK, though, that has been providing some really hot economic numbers recently. That trend continued on Tuesday as the Markit/CIPS construction PMI jumped to 62.6 in November from 59.4 in October.

However, positive economic data have not been able to boost markets recently. That trend also continued on Tuesday. From Reuters:

Fear that the Federal Reserve will scale back its stimulus as the U.S. economy recovers hit world stock markets on Tuesday, with European equities falling the most since August, while safe havens such as the yen and Treasuries rose...

On Wall Street, stocks ended lower for a third straight session.

Tuesday, 3 December 2013

Global manufacturing expands, stocks fall

Economic data on Monday were positive.

In the US, Markit's manufacturing PMI jumped to 54.7 in November from 51.8 in October while the Institute for Supply Management's manufacturing PMI rose to 57.3 from 56.4. In addition, construction spending rose 0.8 percent in October after falling 0.3 percent in September.

In Europe, Markit's eurozone manufacturing PMI rose to 51.6 in November from 51.3 in October while the Markit/CIPS UK manufacturing PMI jumped to 58.4 from 56.5.

In China, HSBC's manufacturing PMI slipped to 50.8 in November from 50.9 in October. Nevertheless, this was better than the preliminary reading of 50.4 and was still the second-highest reading in eight months.

Despite the positive economic data, stocks fell on Monday. The S&P 500 fell 0.3 percent. The STOXX Europe 600 also fell 0.3 percent. The MSCI Asia Pacific Index slipped 0.1 percent.

Monday, 2 December 2013

Weak US employment drives bull market

From Bloomberg today:

The weakest employment recovery in seven decades is proving a boon to equity markets.

Five years into a rally that has restored $14 trillion to share prices, U.S. payrolls remain 1.5 million below the level in 2008, according to data compiled by Bloomberg...

While American workers struggle, investors are benefiting as expense reductions and record low borrowing costs drive profits and underpin a 167 percent advance in the S&P 500 over the past 57 months. To bulls like Michael Holland at Holland & Co., equities will keep rallying as long as the Fed remains more concerned about employment than inflation.

“The weakness in jobs is continuing fodder for the Fed to fulfill its most recent and steadfast comments about the support of the economy,” Holland, who oversees more than $4 billion in New York, said in a Nov. 26 phone interview. “Until the labor market gets better, the two parts of dual mandate have to be served,” he said. “I’m still pretty set in my position and prepared to see the market go higher.”

It is not just stocks that are benefitting from easy monetary policy. Housing markets have also seen prices surge, especially outside the US. From Nouriel Roubini last week:

[S]igns of frothiness, if not outright bubbles, are reappearing in housing markets in Switzerland, Sweden, Norway, Finland, France, Germany, Canada, Australia, New Zealand, and, back for an encore, the UK (well, London). In emerging markets, bubbles are appearing in Hong Kong, Singapore, China, and Israel, and in major urban centers in Turkey, India, Indonesia, and Brazil.

Signs that home prices are entering bubble territory in these economies include fast-rising home prices, high and rising price-to-income ratios, and high levels of mortgage debt as a share of household debt. In most advanced economies, bubbles are being inflated by very low short- and long-term interest rates. Given anemic GDP growth, high unemployment, and low inflation, the wall of liquidity generated by conventional and unconventional monetary easing is driving up asset prices, starting with home prices.

Indeed, a report on Sunday from the China Index Academy showed that home prices in China continued to rise in November. The average price of a new home in 100 major cities rose 10.99 percent year-on-year last month, faster than the 10.69 percent increase in October.

At least China's manufacturing sector also continued to expand in November. Another report on Sunday from the National Bureau of Statistics showed that the official manufacturing PMI for China was unchanged from October at 51.4.