China's industrial profits grew at their slowest pace in seven months. Manufacturers blamed soft demand and a broader economic slowdown. Retail traders immediately checked their portfolios to see which China ETF they panic-bought in March is now down 34%.
The headline says "growth cools." Growth didn't cool. Growth is still happening. Profits went up. They just went up slower than before. This is like complaining your Lamborghini only hit 140 mph when last month it hit 160. Except you don't own a Lamborghini. You own a 2007 Honda Civic with a check engine light that's been on since 2019.
Soft demand apparently weighs on manufacturers. Hard demand would have been better. Someone should tell Chinese factories to make products people actually want to buy. Revolutionary strategy. No one's ever thought of that.
Economic slowdown deepens. Deepens implies it was already slow and now it's slower. So this is a slowdown of a slowdown. A deceleration of deceleration. Mathematically that's just the second derivative of economic activity. Your technical analysis course didn't cover calculus because you bought it from a guy on YouTube who trades from his mom's basement.
July's numbers represent the weakest pace this year. We're in August. This year has had seven months. Saying something is the worst in seven months when only seven months have happened is like saying this is the worst date I've been on this week on a Monday night. Technically true. Profoundly meaningless.
The broader slowdown continues to weigh on everything. Gravity weighs on things. Economics doesn't weigh. Economics measures. But financial journalists need their metaphors because numbers are hard and readers get bored.
None of this matters for your trading decisions. China's industrial profits could triple tomorrow and your positions would still be red because you bought the top after watching a TikTok.
Photo by Camillo Corsetti Antonini on Unsplash
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