The Traderszone Network

It seems Kyle Bass’ warning was extremely timely. The deleveraging of China’s $4 trillion shadow banking system just accelerated massively as Bank Wealth Product Issuance crashes 15% month-over-month. With stocks and bonds already plunging, commodities joined the ugliness tonight with Dalian Iron Ore limit down (8%) at the open (not helped by tumbling auto demand).

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Caixin Services and Composite PMIs for April
From the Markit / Caixin report (bolding is mine):
– Caixin China Composite PMI data (which covers both manufacturing and services) signalled a
Commenting on the China General Services PMI data, Dr.
Zhengsheng Zhong, Director of Macroeconomic Analysis at
CEBM Group said:

China’s credit system expanded “too recklessly and too quickly,” and “it’s beginning to unravel,” warns Hayman Capital’s Kyle Bass.

Crucially, Bass notes that ballooning assets in Chinese wealth management products are another sign of a looming credit crisis in the nation.

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A live head-to-head debate Wednesday between French presidential candidates Emmanuel Macron and Marine Le Pen rapidly descended into a tit-for-tat battle in which both struggled to land a knockout punch.
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Australia – trade balance for March comes in at a miss on expected and under the February result
At a surplus of 3.107bn Australian dollars  
– expected AUD3250mln
Exports of goods and services for March are up 2% m/m (sa)

The current bull market is getting long in the tooth — it’s in its eight year — which makes it challenging to find “cheap stocks,” which I’d define as stocks that sport one or more attractive valuation metrics relative to their current financial performance and long-term growth prospects.

Moreover, there are usually good reasons why many cheap stocks are cheap; typically, they’re either widely considered to have very limited future growth potential, or they’re quite risky for various reasons. 

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PBOC open market operations today
– To inject 30 bn yuan through 7-day reverse repos
– To inject 10 bn yuan through 14-day reverse repos
– To inject 10 bn yuan through 28-day reverse repos 
The 50bn yuan injection today matching the 50bn maturing, for a net of zero on the day.