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China's Data Looks Too Good to Be True: Market Recon

"You have to really stretch your imagination to infer what the intrinsic value of Bitcoin is. I haven't been able to do it. Maybe somebody else can."

Far East Uncertainty

Yes, "earnings season" has kicked off. The season really gets into the next gear this week, as many high-profile corporations (including 26 S&P 500 names) go to the tape with their quarterly numbers. True, we'll hear on monetary policy this week from the European Central Bank and the Bank of Japan. This all matters, as do Treasury yields, currencies and commodity valuations. There is more under the surface.

Today's story begins in China. The land with the dynamic past, as well as the uncertain future.

China's National Bureau of Statistics released a series of headline-level macroeconomic data while you were watching "Game of Thrones" last night. Most importantly, China scored (at least they say they did) annualized growth of 6.9% for the second quarter, which beat expectations and matched first quarter performance. Is that all? Not even close. June Industrial Production printed at 7.6% growth year over year. Huge. This equaled China's strongest month in those terms since December of 2014. Retail Sales? Strongest since December 2015. Fixed Asset Investment for the moth of June beat expectations, as well. Wow. China seems squared away. All good, right?

Well, not so much for Chinese equity markets. Weakness in Asian markets overnight was really confined to Chinese markets, with the Shanghai Composite rallying hard to finish 1.4% lower. High-level meetings ended on Saturday in Beijing that put together a cabinet-level type of committee that will be known as the State Council Financial Stability and Development Committee. The purpose of this group will basically be the coordination of information among regulators, possibly with the People's Bank of China (China's central bank) at the top of this new food chain.

Basically, you have the expectation that greater regulation -- or at least a better-informed ability to tighten financial control from the top -- could be just around the corner. There were also a spate of small-to-mid-cap Chinese corporations that warned on guidance on Monday morning. In...