El mundo no está muy fino, no andamos para tirar muchos cohetes. ¿Acabará en recesión de nuevo? En EEUU la última fue en 2009 y fue muy corta, gracias a los estímulos financieros masivos de la FED para salir de ella. Y ahora que se acaban allí ¿volverá a caer la economía?
Hay datos buenos y malos. Los buenos: se consume…
Los malos: No se fabrica… En el mundo globalizado, los emergentes son los nuevos amos industriales…
Hay mucha sobrecapacidad todavía:
Y se ha crecido por apalancamiento, por deudas y más deudas, que no se reducen ni a tiros:
Las deudas públicas desmadradas:
Deudas de todo tipo:
"People's confidence that the consumer can somehow offset this industrial recession that we've had is really being shaken to the core with the disappointing numbers from some of these major retailers" - James Abate, CIO of Centre Funds.
Recessions Are Underway
China drove the recent economic boom, just as it is behind the recent malaise. A turnaround in Chinese demand would certainly change things but the current data does not look promising.
For China’s trade partners, it means recession today. Only Germany and the US look positioned to weather the storm. Expect the next macroeconomic leg down to start in January. Between now and then, data will continue to weaken incrementally. Expect urgent Central Bank intervention in Taiwan, Korea, Brazil, and Australia.
It’s Not a US Recession… Yet
The US economy may be only 30% dependent on exports, but a sudden drop still hurts. Especially when GDP is growing only 2%.
The domestic hit this year from the downturn in commodities is well known. Falling prices and production immediately led to lower capital expenditure (CAPEX) spending on pipelines, extraction equipment, and so on. That extended to basic industrial component suppliers like pumps and fasteners, among others.
US exports pulled down as global customers got whacked.
After rising 2% from 2013 to 2014, non-petroleum exports suddenly contracted: down -3.5% year-to-date through August.
+ Metal Exports -$3B
+ Machinery Exports -$8B
+ Industrial Machinery -$3B or -5%
While direct exports to China have fallen only $2B, the remaining drop is still China-related. The bulk of the export drop comes from commodity producing countries. Mexico and Canada account for $20B of the export drop and finished-goods producing countries that export to China (EU) account for $10B.
Bottom line: You can’t strip out $34B from the US economy without significant blow-back. If oil and mining companies were the first to be hit, the second victim of China’s downturn has been industrial goods suppliers. The next wave will be operating expenditures (OPEX), in the form of temporary workers.
The US Response: Slower Production
Hats off to US producers for responding quickly. Businesses have dramatically curtailed factory expansion and spending on capital goods.
The swift response is also a warning sign: if demand remains sluggish, additional cuts will come quickly.
Capital goods spending has also dropped. Some of that comes from IT spending shifts(Windows 10 release has pushed out some IT spending, the Cloud is reducing hardware spending). Most of the drop is business retrenching in the face of an inventory overhang.
Unfortunately, US producers are still behind the curve. While inventory production has slowed, demand is slowing even faster. US non-petroleum exports are contracting faster. The result: inventory overhang.
US: Weak Exports, Sudden Downturn in Imports
Not only have exports fallen to the lowest level since 2012; per the latest Census Bureau trade data through August, the pace is accelerating. That extends to exports minus food, autos, and oil which shrank 2X the rate of the previous six months.
The worst is yet to come. For more recent data, we looked at the biggest ports on either US coastline: Los Angeles, Long Beach, New York, and Savannah. (The individual port data was distorted by the 1Q 2015 West Coast ports slowdown and subsequent re-routing of cargo shipments via East Coast ports. So we combined all ports to get a clear overview.)
No surprise, the export story remains grim. Volumes continue to contract although the pace is flat, but this data includes oil exports and we know that they contracted in 4Q 2014 and 1Q 2015. Adjusting for oil and cargo, exports have probably contracted at a more constant pace. This means that it is possible that we are approaching a bottom of sorts.
Big surprise, imports turned for the worse. September imports suddenly collapsed to 0% y/y. The China-facing ports of Long Beach (-2%) and LA (-9%) fared the worst. It’s the lowest level of shipments since 2009. Just a guess, but it fits the industrial slowdown story (not holiday shopping season related).
Semiconductors: No Bottom and Continued Manufacturing Softness
Back in August, Southbay Research noted that semiconductor companies were uniformly less bullish. Recent earnings calls have reinforced the less bullish picture, and no wonder: top-lines have begun to contract.
Semiconductor companies are preparing for no growth. Silicon wafers are the basic building blocks of semiconductors. After surging last year, volume demand has collapsed from 11% in 2014 to barely 2% this year. Expectations are for 1% growth next year.
The standard playbook says to start with CAPEX cuts. The top three semiconductor manufacturers announced CAPEX cuts in the last month:
+ Intel lowered CAPEX a further $500M, bringing total CAPEX budgets down from $11B last year to $7B.
+ Samsung cut CAPEX $2B or 20%.
+ TSMC to cut CAPEX $3B or ~30%.
The reason: China demand is lower than expected. Last year was a boom time for semiconductor makers as the Chinese smartphone market continued to surge. In particular, a new cellular infrastructure roll-out boosted sales of higher end phones. However, actual demand was overstated. The desire to not miss out on a sale drove handset makers to over-order.
“[There was] an artificial peak in retrospect meaning there was a lot of inventory being built up by our customers who all thought they were going to get a higher share… we had many customers thinking they were going to get a bigger share out of that.” -Jon Olson, XLNX CFO
The result was that supply exceeded demand and inventories surged. As the CEO of TSMC put it, the sudden weakness was surprising. The smartphone supply chain spent the summer bleeding off excess inventory. But demand remains weak. The China smartphone market contracted in 2Q. TSMC now forecasts 0% semiconductor growth in 2016, down from the previous forecast of 3%, citing China as the reason for weakness.
“Most of our customers are pretty optimistic about their own business… but growth has just slowed at least for now. And I think when you are CEO of the company and you take a look at what’s going on out there, you are sort of trying to save a little bit of money right now and waiting to see what happens.” -Don Zerio, CFO LLTC
Indeed, recent semiconductor sales continue to contract, and that’s after we include the massive production ramping for the new iPhone release (heavy demand for chips).
Expect more cost cutting and the start of layoffs. Beyond cutting back expansion plans, some companies are selectively shutting down production lines. Adding to the pain of excess capacity, more capacity is coming online. We expect layoffs and consolidation to accelerate into 1Q 2016. This is a great time for Chinese companies looking to hire talented engineers.
Abrazos,
PD1: Por aquí pasa algo similar…
El comercio mundial lejos de recuperarse da señales de empeoramiento. Las importaciones chinas se han desplomado en octubre. China y los emergentes tenían un elevado crecimiento liderado por la inversión orientada principalmente a la exportación. El consumo mundial crecía en países desarrollados por el aumento del endeudamiento, pero la crisis de deuda lo ha reducido significativamente y el ciclo de inversión en emergentes se ha frenado.
La caída de los precios de las materias primas es un efecto de este frenazo del ciclo de inversión y consumo global, y también una causa, ya que la inversión en el sector petrolero y minero concentraba buena parte del crecimiento de la inversión mundial. Arabia Saudí tendrá un déficit público superior al 20% del PIB en 2015. Por lo tanto, buena parte de los vencimientos de sus inversiones retornarán para financiar su gasto interno. La pregunta es ¿quién va a refinanciar esos vencimientos de deuda? Y si consiguen el dinero, la siguiente pregunta es ¿a qué tipo de interés y con cuántas garantías adicionales? 2016 será un año de fuerte restricción de crédito global y afectará especialmente a emergentes, muy especialmente a Latinoamérica y sobre todo a sus empresas que se endeudaron en dólares en los mercados internacionales.
Europa salió de su doble recesión de 2012 exportando al exterior. El consumo estadounidense y británico mantiene su dinamismo y la fortaleza del dólar y la libra esterlina favorecen las exportaciones europeas. Pero las exportaciones a emergentes están sufriendo un retroceso que continuará en 2016. Todas las previsiones para 2016 se basan en una recuperación del comercio mundial que ni está ni se la espera.
La producción industrial alemana de septiembre ya ha dado la señal de alarma con un fuerte desplome de los bienes de capital. Alemania ha sido el país más beneficiado del ciclo de inversión emergente y será el más perjudicado por el frenazo. La supuesta locomotora europea vivía del gasto del resto del mundo y el gasto se ha parado.
El BCE ha identificado el problema y ya se habla de bajar más los tipos, a terreno negativo, y ampliar la compra de deuda hasta 2017. Europa se está japonizando y los líderes europeos nos intentan convencer de que Europa va bien y de que la política económica es un éxito. Pero en Grecia el Gobierno cayó, en Portugal el Gobierno está cayendo y en España es muy probable que el Gobierno caiga.
La Comisión Europea ha identificado el problema de estancamiento secular y debilidad de la inversión y ha puesto en marcha el Plan Juncker. La clave es invertir e innovar. Pero se deben reducir inversiones no rentables y reestructurar las deudas. No se debe cometer el error de Japón de salir de una crisis de sobreinversión y deuda con más sobreinversión y más deuda.
Y hay que incrementar la presión sobre los países con superávit exterior crónico, como Alemania, para que acometan planes de estímulo del consumo y la inversión. Si Europa tiene un crecimiento anémico, en España no seremos capaces de reducir la deuda y la pobreza.
PD2: Estas son las reservas de divisas que cuentan los países para enfrentarse a una nueva recesión, si es lo que nos toca:
PD3: Hay que hacer las cosas desde el amor y no desde las prisas. Que cuando tengas que estar con una persona, estés; cuando tengas que trabajar, trabajes; cuando quieras (puedas) leer, leas; y cuando vayas a rezar el rosario, lo reces… Las mujeres pueden hacer dos y tres cosas a la vez; los hombres somos direccionales y debemos hacer una cosa tras de otra. Pero hay que ponerse y no quedarse pegado a la tele…
