Chapter 41: Manufacturing PMI Data

While Zhang Yang and He Jing were having dinner, the capital market outside was far from calm. Undercurrents were gradually rising, and various rumors, both true and false, were sweeping through major discussion forums.

The first rumor was that Yanjing Hualian Department Store Co., Ltd. had reportedly submitted an application for a merger and reorganization to the China Securities Regulatory Commission (CSRC), intending to purchase assets through the issuance of shares, involving consolidation in the commercial real estate sector.

The second rumor concerned the Zhonghong Zhuoye Group, which was allegedly acquiring the Keyuan Group through asset subscription and private placement of shares, becoming the latter's controlling shareholder in an attempt to achieve a backdoor listing.

The third rumor suggested that the CSRC would deepen financial reforms, optimize the market regulatory environment, and increase institutional transparency to pave the way for future capital market innovations.

Compared to these unverified market rumors, the newly released manufacturing PMI data for March was confirmed information, providing strong support for the market's performance the following day.

What is PMI data?
PMI stands for Purchasing Managers' Index, composed of indicators such as new orders, production, and inventory. By looking at the "boom-or-bust" line of the PMI data, one can intuitively judge the economic climate. The threshold is 50%; above 50% indicates economic expansion, while below 50% indicates contraction. For example, a manufacturing PMI of 52 signifies economic growth, while 49 indicates a recession.

China's recently released manufacturing PMI for March rose to 52.4%, marking the fourth consecutive month of growth and a breakthrough above the boom-or-bust line, indicating that the manufacturing sector was gradually warming up.

What happens when the manufacturing sector warms up? Most intuitively, it means that enterprises are expanding production and will require more labor, such as production workers and technicians. Secondly, it affects the entire industrial chain, involving upstream raw materials, midstream processing, and downstream sales. Once it recovers, it drives demand expansion across the entire chain.

Manufacturing PMI is also known as a direct economic indicator. To determine whether an economy is expanding or contracting, one only needs to look at its manufacturing PMI.

At this moment, on stock market forums, retail investors were already popping champagne in anticipation.

[A-Share Brother Wang]: The manufacturing PMI has risen for four consecutive months and broken through the boom-or-bust line. This shows that our country is accelerating its escape from the shadows of the economic crisis, and since the stock market is the barometer of the economy, the market will soar tomorrow!

[Wolong Here]: Bull markets don't talk about tops, and bear markets don't talk about bottoms. Clearly, we are in a restorative bull market. I don't think there is any resistance level for this rally; it will climb straight back to the 6124 points of October 2007.

[Stock-Loving Meow]: With PMI rising for four months and the added boost from the central bank's first-quarter routine meeting, the major players surely won't act like villains tomorrow, right?

[Little Chen]: Don't worry, I can already smell the faint scent of a small bull market.

All current market data suggested that the major indices would continue to push upward.

***

In Chancheng, Guangdong, within the main urban area, hot-money trader Liao Guopei, known as "Chancheng Shadowless Kick," felt significantly more at ease the moment he saw the March manufacturing PMI data.

The stock he was currently heavily invested in, Changan Automobile, belonged to the traditional manufacturing sector. The continued rise of the manufacturing PMI, breaking through the 50% threshold, also represented a return in consumption for large-ticket items like automobiles. Only when car companies make money and their performance improves does the stock price have the driving force to rise.

"The manufacturing sector has been warming up for four months; perhaps I can use this good news to pull another limit-up," Liao Guopei whispered.

He still had 6 million in cash on hand. If he joined forces with a few other hot-money traders, they might actually be able to ignite a rally and seal the limit-up again. Thinking of this, he quickly clicked his mouse to open the chat group he shared with traders like Chen Sanrong (known as "Jumping Brother") and "Stock Trading Provider."

[Chancheng Shadowless Kick]: The manufacturing PMI has risen for 4 consecutive months and broken the 50% line. Should we pull another limit-up and offload?

Offloading during positive news was an unspoken rule among major hot-money traders. If they sold directly, retail investors would never have enough buying power to absorb the volume. But if there was good news, retail investors would eagerly scramble to catch the high-priced shares, only to be deeply trapped. This is why there is a saying in the A-share market: "Good news landing becomes bad news." Why is it bad? Because someone is taking the opportunity to dump their shares.

Shortly after Liao Guopei sent the message, someone replied.

[Stock Trading Provider]: That works. I still have half my position. We ignite it in the morning; if the buying power is strong, we dump all the shares to the retail investors. If it’s weak, we offload slowly.

[Nanyang War Song]: Let's do it!

[Bamboo Path]: I was just about to discuss this with you all. After all, with such big positive news, it would be a waste not to use it to trap the retail investors.

[Chancheng Shadowless Kick]: It's settled then. We'll control the market during the pre-market call auction tomorrow. If the selling pressure is heavy, we'll abandon the move. If it's light, we pull another limit-up.

[Nanyang War Song]: No problem.

[Stock Trading Provider]: OK.

Of the seven people in the group, six reached a consensus; only Chen Sanrong, who had already cleared his position, did not participate in this operation. Watching the group messages scroll by, it would be a lie to say he didn't feel regret, because the feeling of missing out was no better than losing money.

***

Elsewhere, at the First People's Hospital of Shanghai, Tao Yuang, having sped home in a panic, was now driving Yue Shuxue to the hospital.

After examinations by doctors and equipment, fortunately, there was nothing serious. This brought a sigh of relief to both Yue Shuxue and Tao Yuang. Although they hadn't registered their marriage, they performed the duties of a married couple several times a week. However, after six or seven years, Yue Shuxue had never conceived. They had gone for check-ups, and neither had found any issues, eventually receiving a report stating a "hard-to-conceive" constitution. Now that she had finally conceived, if she were to miscarry, both of them would be devastated.

Sitting on the bed provided for pregnant women, Yue Shuxue looked at Tao Yuang and asked, "Were you busy with work just now?"

"Yes."

Tao Yuang replied, then explained everything about Li Zhenrui's intention to groom him and his meeting with Zhang Yang.

Upon hearing this, Yue Shuxue's expression turned serious. "Isn't the risk too high? That Zhang Yang could hold this over you. What if he tries to blackmail you..."

"He shouldn't." Tao Yuang shook his head and offered his backup plan: "I am only cooperating with him in the short term. During this time, I will also look for suitable financial analysis talent to build my own team. If Zhang Yang tries to blackmail me, I'll have to teach him a lesson through the law."

"Handle it yourself, and don't let the company's senior management know about this. Otherwise, I might not be able to protect you."

"I know what I'm doing."

Tao Yuang had been in the industry long enough to have his own methods. He would not let anyone destroy his future, including Yue Shuxue.

At the same time, at the Peace Hotel, in the Jiu Xiao private room, after eating and drinking to his heart's content and taking photos of the Huangpu River view, Zhang Yang led He Jing out of the hotel.

He Jing was initially immersed in the beautiful photos and didn't notice anything unusual. It wasn't until she sat in the passenger seat of the Maserati that she suddenly remembered something. She looked at Zhang Yang and said, "Did we forget to pay the bill?"

"Seems like it." Zhang Yang started the car with the mechanical key.

"..."

He Jing was stunned. What did "seems like it" mean? They clearly hadn't paid at all! She had read in news reports that the owner of the Peace Hotel was a figure who walked on both sides of the law. If they skipped the bill, wouldn't they get hacked with a knife?

"Then let's go back and pay." As He Jing reached for her seatbelt, Zhang Yang stopped joking and confessed, "Someone already paid for this meal. If it hadn't been settled, do you really think the waiters at the Peace Hotel standing every ten meters were just there for decoration?"

"Someone paid?" He Jing was confused. Her brain raced, thinking of what Zhang Yang had mentioned earlier that evening, and she retorted, "No wonder you became so generous; it turns out you were borrowing flowers to offer to the Buddha, not spending a single cent yourself."

"As the saying goes, time is money. Strictly speaking, I did pay," Zhang Yang joked with a faint smile.

"You're such a sophist." He Jing rolled her eyes.

If she had known someone else was paying, she wouldn't have been so terrified, listening to the sound of her wallet breaking. Now that she thought about it, the A4 Wagyu steak was actually quite delicious...

As they talked, the Maserati drove out of the underground parking lot and sped toward the Wudong Road campus of the Shanghai University of Finance and Economics.