China's factory activity grew faster than expected in June. Economists predicted one number. They got a bigger number. Retail traders now think they understand macroeconomics.
The reason for the beat? Tech export demand. Specifically, artificial intelligence technology. Somewhere right now a guy with $847 in his Robinhood account is googling "how to invest in Chinese AI" and finding a leveraged ETF he can't pronounce. He'll buy it at the top. He always does.
Middle East turmoil tried to drag down the numbers. It failed. China's manufacturing engine held up anyway. Turns out factories keep making products even when Twitter is convinced the world is ending. Revolutionary stuff.
The technical picture remains unchanged. Support exists where it existed yesterday. Resistance exists where it existed yesterday. None of this news moves those lines. None of this news ever moves those lines. But please, tell me more about how PMI data is going to make your $3,000 portfolio retire you early.
AI demand saved the day. The same AI that retail traders think will pick stocks for them. The same AI they'll blame when those picks lose money. The same AI that apparently needs so much hardware that Chinese factories can't make it fast enough. Full circle.
Here's what happens next. Someone reads "China manufacturing beat expectations" and buys Chinese equities. Someone else reads "Middle East turmoil" and sells everything. They both lose money. The factory workers in Shenzhen keep showing up to work regardless. They don't check Bloomberg before their shift starts.
The manufacturing data printed hot because companies needed chips and servers and components. Not because of monetary policy. Not because of sentiment. Because actual humans wanted actual products. Imagine that.
Your charts still work. Their charts still don't.
Photo by Markus Winkler on Unsplash
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