International News (Issue 380) – 3 December 2015

So this week there is a lot to cover, unlike the last.

We can start with the US this week.

The big Black Friday Thanksgiving sales period was a bit hit-and-miss, and certainly didn’t pack the momentum we saw in recent years. Amazon (AMZN) was the clear winner, as the one apparent theme to come from the period was the continue migration from bricks-and-mortar to online.

Fascinatingly on AMZN it has just introduced a new online grocery services in the UK market, aimed at delivering non-perishable (and some chilled) items to clients of their Amazon Prime service.

I have to say, not a day goes past when I don’t marvel at the new and varied services the likes of AMZN, Google (GOOG) & Apple (AAPL) are getting themselves into through their revolutionary business models.

In China this week we saw the release of November manufacturing data, which quite frankly is becoming more of a yawn than ever. Given much of northern China is about to be covered in a heavy blanket of snow, don’t expect any uptick in industrial activity until at least February.

The Chinese currency has softened up in recent weeks which is something to pay attention to. Most brokers expect a further interest rate and bank reserve requirement cut before Christmas, which will hopefully assist the financial system in the lead up to January’s Chinese New Year holiday period.

It’s worth watching the Chinese Yuan, lest it weaken further, particularly since this was the perceived initial catalyst for the broader investment market sell-off witness in August and September.

Lastly in China, it is worthwhile acknowledging the huge jump in property development shares this week. Chinese largest developer, China Vanke (000002 CH) rose 30% this week on little concrete news-flow other than the continued stabilization in Chinese property prices.

There were rumours suggesting the Chinese government may allow tax offsets against mortgage lending (negative gearing), but this was denied (and seems unlikely).

What is factual and undeniably positive, is that the property shares are running and property prices are not falling. For all the doubting Thomas’ on the Chinese property market, the recent evidence is hardly supportive of the Armageddon scenario.

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