Hope you are enjoying the day off. I wanted to touchbase regardless due to China’s economic releases last night.

• Q4 GDP YoY 6.4% versus estimate 6.4% and Q4 2017 6.5%
• Q4 GDP YTD 6.6% versus estimate 6.6% and 2017 6.7%
• Q4 GDP Quarter over Quarter 1.5% versus estimate 1.5% and Q3’s 1.6%
• Dec Retail Sales 8.2% versus estimate 8.1% and Nov’s 8.1%
• Dec Retail Sales YTD 9% versus estimate 9% and 2017’s 9.1%
• Dec Industrial Production YoY 5.7% versus estimate 5.3% and 5.4%
• Dec Industrial Production YTD YoY 6.2% versus estimate 6.2% and 6.3%
• Fixed Asset Investment YTD YoY 5.9% versus estimate 6% and 2017’s 5.9%
• Dec Property Investment YoY 9.5% versus Nov’s 9.7%
• Jobless Rate    4.9% and Nov’s 4.8%

Takeaway: Yes, overall GDP percentage growth was less than in years past though the majority of the data released exceeded expectations. We are apt to see tariff front loading rolling off which will lead to declining economic releases over the coming months. Year over year comparisons will become more difficult as it takes time for China’s monetary and fiscal stimulus to work their way through the system. Markets are forward looking though. Potential descalation of the trade war would assist dramatically. Within the press release from the National Bureau of Statistics there were several interesting data points worth sharing.

• Online retail sales increased 23.9% to RMB 9 trillion accounting for 18.4% of all retail sales
• Births 15mm/Deaths 9.93mm
• Within the 1.395 billion population, 713mm males and 681mm females
• Within the working age population between the ages of 16 to 59, 897mm/64% of the population

Hang Seng gained +0.39%/105 index points on moderate/slightly below the average volume over the last year with 31 advancers and 18 decliners. China’s economic data release was positive as expectations were quite low in addition to China’s Friday announcement of vastly increasing US imports over the next six years. Within the Hang Seng, AIA was down -1.86%/-46 index points while Tencent gained +0.89%/25 index points and China Construction Bank +0.9%/19 index points. Within the MSCI China All Shares’ HK stocks, tech gained +2.03% led by Apple supplier Sunny Optical followed by energy +1.66% and discretionary +1.47%. Utilities eased –0.88%, materials -0.60% and staples -0.44%. Southbound Connect volumes were elevated in mixed trading. Banks were in favor with mainland investors though Tencent experienced 2 to 1 selling. Last week mainland investors bought $414mm of HK stocks.

Shanghai & Shenzhen gained +0.56% and +0.61% on light volumes and decent breadth. Within the MSCI China All Shares’ mainland stocks, energy gained +0.9%, tech +0.73% and discretionary +0.66% while real estate eased -083%, utilities -0.2% and financials -0.16%. Northbound Connect flows were moderate with buyers outpacing sellers. MSCI Inclusion stocks were volume leaders in mixed trading as Kweichow experienced 2 to 1 buyers while Ping An saw sellers outpace buyers. Last week foreign investors added $2.4B to mainland stocks.

IMF Managing Director Christine Lagarde opened the Davos World Economic Forum on a dour note downgrading global growth to 3.5% in 2019.

Pinduoduo (PDD) reported a hack of online coupons.

Movie ticketing firm Maoyan has postponed its IPO to February 4^th as the company announced Xiaomi as a cornerstone investor joining Tencent, Hylink Digital Solutions and Prestige of the Sun.

I ran across an interesting news article that the top 20% of Chinese households now have assets similar to the average US household of $657,000.

CNY 6.79; eases versus the US $ though DXY higher

Bond prices eased in what could be the first sign we are seeing money out of bonds and into equities.

• Yield on 1 Day Chinese Gov’t Bond 1.80%
• Yield on 10 Year Chinese Gov’t Bond 3.13%
• Yield on 10 Year China Development Bank Bond 3.72%

Commodities were positive on both the Dalian and Shanghai