STOCK MARKET WATCH -- Friday, 24 July 2015

[Demeter]

9. Apple just confirmed everybody's biggest fear about China

http://finance.yahoo.com/news/heres-most-negative-thing-youll-122545641.html

Earlier this week, China reported better-than-expected gross-domestic-product growth in the second quarter, growing 7% against expectations for a 6.9% expansion. But even this growth rate is China's slowest in over two decades.

And now Apple's disappointing quarter may be confirmation that China's economy is not only slowing, but slowing more dramatically than markets expect...

...Everyone worried about an economic slowdown in China and the impact it could have on the US economy should read that again: "... evidence of a widespread demand reset from China is mounting ..."

On Tuesday, the defense giant United Technologies cut its full-year sales outlook for, among other reasons, "a slowing China." And in June, Chinese auto sales declined over the prior year for the first time in over two years.

Decidedly negative signals from the world's second-largest economy.

In the past few months we've seen a huge sell-off in the Chinese stock market, which has been viewed as either a harbinger of assured global economic doom or not a big deal because the Chinese economy isn't as financialized (meaning the actual economy won't be greatly affected by big swings in the stock market) as, say, the US economy.

But as Cowen notes, whether the impact on US companies is related to the recent stock-market action or not, there appears to be something off about the Chinese economy. At least as it appears to some of the biggest US companies...