Chinese factories slow down in July: the index falls to 49.2, worst in 5 months

WHAT HAPPENED

Chinese factory activity contracted in July: the PMI fell from 50.3 to 49.2, its lowest level in five months. Fewer domestic and foreign orders, along with typhoons, slowed production.

WHY IT MATTERS

China buys huge amounts of copper, soybeans, iron, and oil. If its factories produce less, they may order fewer raw materials and lower their prices, affecting exporters like Brazil and Mexico. Electronics, clothing, and other products could also become more expensive or delayed.

AND FOR YOUR PORTFOLIO

For a long-term portfolio, the data connects China with companies in raw materials, industry, transportation, and consumer goods in other countries. A slowdown in China could reduce revenues for exporters, although technology and industrial equipment sectors continue to grow.