Advance Signals of Major Macro Turns

Our Flash Data™ have correctly forecasted every major turn in the Chinese business cycle many weeks ahead of official and private indicators.

CBB’s Q3-18 flash data identified the manufacturing sector’s sharp reversal a full 4+ weeks ahead of broader markets

In 1H 2018 the Chinese manufacturing sector appeared to defy gravity, remaining miraculously robust despite the onset of the US-China trade war.

Strengthening official August PMI suggested the surge would continue, but CBB flash data told a very different story: export orders were falling off a cliff, presaging a major downturn for the sector in both Q3 & Q4.

It took 4 weeks, but the PMI soon reversed course—and then continued to slide for 4 straight months.

Market Facts:

α: CBB Flash Data signaled the end of China’s 2 year+ manufacturing rally on August 31, 2018.

x: Official PMI missed the manufacturing slowdown till September 30, 2018.

CBB’s Q4-18 flash data saw the economy’s sharp reversal a full 4+ weeks ahead of broader markets

In November 2018, the official PMI stayed above contractionary territory for the 28th consecutive month, suggesting the economy’s long streak of outperformance would continue.

CBB clients knew better. Our Q4 flash data showcased the worst results we’d seen in three years, with every sector and nearly every headline metric cratering.

It took 4 weeks, but the PMI ultimately followed suit, sliding hard for the next 2 months and creating a pervasive sense of gloom in the early days of 2019.

Market Facts:

α: CBB Flash Data called the late 2018 downturn on November 30, 2018.

x: Official PMI did not enter contraction territory until December 31, 2018.

CBB’s Q1-19 flash data saw the economy’s “surprising” upturn a full 4+ weeks ahead of broader markets

After three straight months of weak and contractionary readings of the official PMI, sentiment on the Chinese economy was at a multi-year low.

Yet while the government gauge was still in free fall, our February flash data showed an unexpected—yet “unmistakable”—recovery.

A full 4 weeks later the PMI, too, reversed course, leading market sentiment to surge—both in China and around the globe.

Market Facts:

α: CBB Flash Data showed a Q1 2019 rebound on February 28, 2019.

x: Official PMI failed to register an expansion till March 30, 2019.

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