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<keyword id="20207838" type="General" weightage="20" keywordseo="dsp-mutual-fund" source="keywords">DSP Mutual Fund</keyword>'s September 2024 Netra report credits <keyword id="19895063" type="General" weightage="20" keywordseo="india" source="keywords">India</keyword>'s strong economic recovery to increased fiscal expenditure. The report, which tracks current economic trends and market insights through various charts, emphasizes the need for the private corporate sector and households to play a larger role in sustaining the ongoing growth momentum. Netra also pointed out an unsettling calm in the markets, with the Nifty 50 TRI index maintaining an impressive 53-month streak without a 5% decline and 13 years without a drop greater than 10%. Sahil Kapoor, Head of Products and Market Strategist, DSP Mutual Fund, said, "The calm in the markets, marked by an unnerving lack of volatility, is a double-edged sword. While it provides a sense of stability, it also masks underlying risks that could surface unexpectedly, catching investors off guard. To ensure a sustainable recovery, there is a need for the private sector and households to take the lead, transforming fiscal stimulus into lasting economic growth." However, the report notes a shift in market dynamics, with the momentum factor, which has outperformed since the COVID-19 bottom, beginning to lose its dominance. At the same time, the quality factor, which had underperformed over the last four years, is now seeing a resurgence, potentially indicating a change in market leadership that could favour quality-orientated funds, both active and passive. The report highlights the critical role government spending has played in the recovery, with a focus on capital investments crucial for future growth. However, contributions from the private corporate sector and households have lagged. It also draws attention to a slowdown in India's per capita consumption, approaching lows seen in previous cycles. Given that consumption accounts for around 60% of GDP, it is vital that this sector grows at a rate exceeding GDP growth to stimulate private capital expenditure. India's <keyword id="487578" type="General" weightage="20" keywordseo="tax-collections" source="Orion">tax collections</keyword> have demonstrated robust growth, with gross tax revenue showing a five-year compound annual growth rate (CAGR) of 14 %. This growth, largely driven by <keyword id="6354751" type="General" weightage="20" keywordseo="income-tax" source="Orion">income tax</keyword>, indicates a rising dependency on capital gains and stock market performance, introducing new vulnerabilities to the economy. The banking and financial services sector (<keyword id="19910880" type="General" weightage="20" keywordseo="bfsi" source="keywords">BFSI</keyword>) has emerged as a key driver of market earnings, recording a 12 % increase in profit after tax (PAT) growth, significantly outpacing the 4.6 % growth observed in non-BFSI Nifty 50 companies. This disparity underscores the sector's importance in India's economic story and highlights promising investment opportunities.

India's strong economic recovery is led by fiscal expenditure: DSP MF

<ul class="summary-list"><li>Israel launched a ground offensive against Hezbollah targets in southern Lebanon on Tuesday.</li><li>Despite the Middle East's significant oil production, crude prices were little changed.</li></ul>Israel launched a <a target="_blank" class="" href="https://www.businessinsider.com/israel-launches-ground-offensive-into-lebanon-destroy-hezbollah-targets-2024-9">ground offensive</a> against Hezbollah targets in southern Lebanon on Tuesday in a marked escalation of tensions in the Middle East — and the energy markets largely shrugged.The indifference is significant because the Middle East is a huge producer of crude oil — pumping one-third of the world's supply — so any geopolitical tension in the region could spark some sort of meaningful price gain.This time, oil prices simply nudged up a little.Global benchmark <a target="_blank" class="" href="https://markets.businessinsider.com/commodities/oil-price">Brent crude oil</a> futures were up 0.17% to $71.82 per barrel at 2.14 a.m. ET. Benchmark US <a target="_blank" class="" href="https://markets.businessinsider.com/commodities/oil-price?type=wt">West Texas Intermediate</a> futures were 0.19% higher, at $68.32 per barrel.Notably, the gains followed a 17% decline in Brent and a 16% drop in US WTI futures over the third quarter of the year, when traders were on edge for upside price action amid the developments in the Middle East.The reason isn't rocket science. It's mostly China — the world's largest importer of crude oil."The main cause for the bearish sentiment has been a steady slowing of crude demand growth, especially in China," wrote Henning Gloystein, the practice head of energy, climate, and resources at the Eurasia Group, last month.The world's second-largest economy has been struggling to stage a convincing recovery post-pandemic and is battling multiple challenges, including a property crisis, high youth unemployment, and deflation.Beijing pulled out an <a target="_blank" class="" href="https://www.businessinsider.com/china-economy-aggressive-monetary-stimulus-interest-rate-rrr-2024-9">economic stimulus package</a> last week that massively boosted sentiment in China's previously downbeat stock markets, but most analysts are saying the measures are just not enough to turn the situation around on the ground.Even Chinese leader Xi Jinping <a target="_blank" class="" href="https://www.businessinsider.com/xi-jinping-painful-road-ahead-rainy-days-new-stimulus-china-2024-10">acknowledged</a> the extent of China's problems in the country's National Day speech on Monday, saying the path forward wouldn't be smooth.BMI, a research firm, wrote last week that short positions in Brent outnumbered longs for the first time earlier in September."Sentiment in the market is already weak, with a bearish macro narrative weighing heavily to the downside, and investors are currently far more responsive to bearish price drivers than to bullish ones," wrote BMI's analysts.The sentiment over China has been so poor that <a target="_blank" class="" href="https://markets.businessinsider.com/news/commodities/saudi-arabia-oil-prices-brent-crude-outlook-opec-production-cuts-2024-9">Saudi Arabia</a> has pretty much thrown in the towel on pushing oil higher.The kingdom — which is the world's largest crude exporter and OPEC's de facto leader — is giving up its $100 per barrel price target and ready to increase oil output, the <a target="_blank" class="" href="https://www.ft.com/content/1d186f62-5941-4f9e-aef1-7d93a8a696cd">Financial Times</a> reported last week.This means that Saudi Arabia is looking to corner a larger market share instead of targeting higher profit margins by restricting output.This would be a big shift in policy, since Saudi Arabia has been leading OPEC and the group's allies, including Russia, in maintaining oil supply cuts since late 2022.Despite the downside pressure on oil prices, things could change quickly if geopolitical uncertainty rises further in the Middle East.The US may also provide some support to the market as crude oil inventories hit a <a target="_blank" class="" href="https://www.reuters.com/business/energy/us-crude-gasoline-distillate-inventories-fall-eia-says-2024-09-25/">two-and-a-half year low</a> as of September 20, the latest data available."Yes, it is true that traders are worried about the fact that Chinese demand for oil is not back yet to a level that can make the OPEC stop extending the supply cut process," wrote Naeem Aslam, the CIO at London-based Zaye Capital Markets."However, the fact that the US oil stockpiles are clearing more quickly indicates that the demand for oil in the world's largest economy is trending in the right direction, which is positive for price action," Aslam added.

China's economic issues are so serious that even the oil market doesn't care about Middle East tensions — for now

Bank of America says these 3 higher-risk stocks are well-positioned to take off as rate cuts spur an economic recovery in 2025

<ul class="summary-list"><li>The Evergrande collapse is not China's 'Lehman moment,' but it does complicate an economic recovery, CFR expert said.</li><li>"Unlike Lehman, Evergrande's insolvency is due to its excessive borrowing and aggressive use of leverage, not over-securitization."</li></ul>China's crumbling property sector, its stock market crash, and its gummed-up economy have drawn some comparisons to the 2008 crash in the US.A few weeks ago, the Chinese <a href="https://www.businessinsider.com/evergrande-ordered-liquidate-china-real-estate-property-crisis-winners-assets-2024-1">property giant Evergrande</a> received a liquidation order from a Hong Kong court, forcing the sale of its assets to <a href="https://www.businessinsider.com/china-evergrande-property-real-estate-crisis-debts-collapse-what-happens-2024-2">repay the company's $300 billion worth of debt.</a>This has spurred on the question: is the Evergrande collapse China's "Lehman moment?"The answer, according to one think tank, is no. But it does pose an obstacle to an economic rebound."Evergrande's bankruptcy is not China's Lehman moment; its downfall is unlikely to immediately trigger a contagion across the entirety of China's financial system," Zongyuan Zoe Liu, a Council of Foreign Relations expert, wrote on Tuesday.Back in 2008, Lehman Brothers, choked by a credit crisis, filed for bankruptcy with $613 billion in debt. The dramatic fall was the climax of the subprime mortgage crash, sending shockwaves through the economy.One famed hedge-fund boss said China's property crash was like the <a href="https://www.businessinsider.com/china-economy-crash-real-estate-collapse-property-market-evergrande-bass-2024-2">Great Financial Crisis from 2008 "on steroids."</a>But what happened with Lehman is not exactly what happened with Evergrande, Liu said."[Lehman] failed because of its aggressive lending, facilitated by the overuse of novel, risky, and opaque financial engineering products and excess risk-taking without sufficient risk management," Liu wrote. "Unlike Lehman, Evergrande's insolvency is due to its excessive borrowing and aggressive use of leverage, not over-securitization."Also, Evergrande's loans made up just 0.2 percent of total financial institution lending, Liu explained. Its corporate debt was 0.04 percent of China's domestic bond market.But that doesn't mean China's economy can <a href="https://www.businessinsider.com/us-china-economy-housing-market-2008-bust-crash-real-estate-2024-2">climb out of its hole any more easily.</a> Evergrande's creditors include homebuyers and companies in the property development supply chain — think construction companies, appliance makers, and home decor firms. So its implosion allows weak investor and consumer confidence to metastasize.And that spells <a href="https://markets.businessinsider.com/news/stocks/china-economy-crash-real-estate-property-stock-market-foreign-investors-2024-2">protracted woes for China's economy</a>."[Evergrande's bankruptcy] brings another negative confidence shock to Chinese households and is likely to put more potential homebuyers on the fence about buying," Liu wrote. "Restoring confidence takes time. Meanwhile, low confidence weakens housing market demand growth, dragging down the broader property sector, which constitutes nearly 30 percent of the Chinese economy."

The Evergrande collapse is not China's 'Lehman moment,' but it does complicate an economic recovery, think tank says

<ul class="summary-list"><li>Polling suggests the economy is important to voters in this year's presidential election.</li><li>The economy is doing well across a wide variety of metrics.</li></ul><a target="_blank" href="https://www.businessinsider.com/trump-harris-swing-states-election-2024-10">Election</a> Day is less than two weeks away, and <a target="_blank" class="" href="https://www.businessinsider.com/what-us-economy-would-look-like-with-trump-biden-presidency-2024-5">the economy</a> is top of mind for many Americans.Twenty-eight percent of likely voters in a <a target="_blank" class="" href="https://www.nytimes.com/interactive/2024/10/13/us/elections/times-siena-poll-likely-electorate-crosstabs.html">poll from The New York Times/Siena College</a> from September 29 to October 6 said the economy was the "most important" issue for their vote, which was the highest share among all issues. A <a target="_blank" href="https://www.pewresearch.org/politics/2024/09/09/issues-and-the-2024-election/">Pew Research Center</a> survey from August 26 to September 2 found that among registered voters, 68% of Kamala Harris supporters and 93% of Donald Trump supporters said the economy is "very important" to their vote.Additionally, an <a target="_blank" class="" href="https://apnorc.org/projects/registered-voters-are-split-on-trusting-harris-or-trump-to-handle-economic-issues/">Associated Press-NORC Center for Public Affairs Research</a> poll conducted in October found registered voters were nearly split on who they thought would do a better job handling different areas of the economy, such as jobs and unemployment.The good news is that the economy is broadly doing pretty well these days."We've seen new highs for the stock market's major averages, falling inflation, the Federal Reserve shifting into easing mode and a job market close to the level associated with full employment," Mark Hamrick, a senior economic analyst at the financial services company Bankrate, said in a recent <a target="_blank" href="https://www.bankrate.com/personal-finance/2024-election-and-the-economy-survey/?tpt=a#top-economic-issue">commentary</a>.While data suggests the US economy is robust, Americans may not agree. The index of <a target="_blank" href="http://www.sca.isr.umich.edu/">current economic conditions</a> from the University of Michigan's Surveys of Consumers has stayed stubbornly low throughout the pandemic recovery.Kurt Reiman, cohead of ElectionWatch at UBS Global Wealth Management, told Business Insider that he doesn't think people feel "euphoric" about the economy. "Voters are reminded daily of the high price of goods and services — whether they're renewing their car or home insurance, or they're going to the grocery store," Reiman said.They're not completely off base. There are a few less-rosy data points out there, like rising long-term unemployment and a historically high level of federal debt.As people get ready to head to polling locations or vote by mail, here's how the US economy has been looking.<h2 id="b1568735-2b7f-4c59-a18d-2eedb9252f8b">The unemployment rate has been under 5% since September 2021</h2>After it rose to around 15% during the height of the early pandemic in April 2020, the unemployment rate has fallen to historically low rates. Even though the unemployment rate ticked up to 4.3% this past July — the highest rate since October 2021 — it has dropped since.While unemployment remains low, the average time unemployed workers were out of a job increased to 22.6 weeks in September. So, those out of work are spending more time looking for their next job.<h2 id="a377c75d-6f92-4f82-9cde-9b55e3445625">Job gains have cooled but remain strong</h2>The economy keeps adding jobs, but the labor market has slowed from its red-hot pandemic recovery.The cooler-but-strong job growth is one indication that the US has continued to avoid a recession — the last one being in 2020.<h2 id="3c79dc9c-b337-418f-8654-44a48ca9035f">There aren't as many job openings per unemployed person as a few years ago</h2>One key measure of the labor market has been turning against job seekers. The number of job openings per unemployed person rose to a record-high ratio in 2022 during the Great Resignation but has declined to 1.1 openings per unemployed person in August and looks more like pre-pandemic levels.It's not impossible to find a job, though; Hamrick said there is "still a reasonable chance that someone who's going to be a job seeker will have a measure of success" depending on their sector and location.<h2 id="b156886f-3057-4ae3-81ab-96249d28aa4c">The inflation rate has slowed dramatically</h2>Inflation has been mostly slowing down after spiking in 2021 and 2022 based on year-over-year increases in the consumer price index.While inflation has slowed, Hamrick said consumers feel constrained by still-high prices. However, Hamrick said, "Americans will continue to claw back some" lost buying power as long as inflation continues to settle down while the job market holds up.Wages have been catching up, and real wages, which are adjusted for inflation, grew 1.5% in September from a year ago.The Federal Reserve has targeted a <a target="_blank" href="https://www.businessinsider.com/us-economy-outlook-data-points-to-soft-landing-no-recession-2024-9">soft landing</a> where inflation comes down without mass layoffs. So far, that seems to be happening. Additionally, the <a target="_blank" class="" href="https://www.businessinsider.com/interest-rate-cuts-decision-this-week-federal-reserve-powell-inflation-2024-9">Fed cut interest rates in September</a> — the first cut in four years. There's a <a target="_blank" class="" href="https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html">high chance</a> it will decide to do a smaller cut in November, depending on how the data looks and other factors.<h2 id="3d0817c5-b03c-4e0a-a06d-bb0b9cf4edbf">Real disposable personal income per capita has been looking healthy</h2>Real disposable personal income per capita — a widely used measure of the money people have to spend or save — spiked in the early pandemic due to stimulus checks in 2020 and 2021 and the expanded child tax credits for the 2021 tax year.While real disposable personal income per capita cooled off as inflation accelerated in 2022, it has been gradually rising — and is above where it was before the pandemic and close to the pre-pandemic growth trend.<h2 id="28d1bb36-d16a-4262-837c-72d756c3510e">The S&amp;P 500 in 2024 has hit several all-time highs</h2>During 2024, the S&amp;P 500 has been historically high multiple times. <a target="_blank" href="https://www.marketwatch.com/story/these-6-charts-suggest-investors-should-proceed-with-caution-as-s-p-500-hits-47th-record-high-of-2024-197f7c0a">MarketWatch</a> reported it has hit 47 record highs this year. This index of large publicly traded US companies reflects corporate America doing quite well, and the rising figures may be good for people's retirement savings portfolios.Reiman chalks it up to strong consumer spending, slowing inflation, and lower interest rates leading to higher corporate profits and valuations.<h2 id="940327d3-930a-4b04-ae6e-e7a1a18f7e9a">Confidence among home builders is still low compared to recent years</h2>While the labor market is showing a lot of strength, the housing market is one area of the economy where there are some concerns. More single-family builders are feeling better about housing than a few months ago but are falling short of the confidence seen a couple of years ago. That's based on the NAHB/Wells Fargo Housing Market Index, which tracks the health of the single-family housing market.The index, based on what single-family builders surveyed reported, was a not-too-confident reading of 43 out of 100 in October.<h2 id="5596c1a8-aaad-4fe9-8a2a-12db5abc4c25">Federal public debt as a share of GDP is elevated</h2>Reiman said the Biden administration will be "handing off an economy with higher levels of debt than when taking office." Federal debt is high compared to GDP, even looking beyond the spike of the debt as a share of GDP during the pandemic.While federal debt as a share of GDP was slightly above 100% before the pandemic, recent figures are much higher than in the past. Federal debt was 120% of GDP in the second quarter of this year. In the long run, a high debt-to-GDP ratio may lead to expensive interest costs and future tax hikes or spending cuts.

The economy is a priority for Americans as they head to the polls. Here's what's really going on behind the numbers.

<ul class="summary-list"><li>China's GDP grew 4.6% in the third quarter — its slowest pace of growth in six quarters.</li><li>The People's Bank of China triggered two market support programs after China announced economic data.</li></ul>China on Friday released third-quarter growth data that was its slowest in six quarters, but its stock markets still ended higher on a shot of confidence from its central bank.China's economy grew 4.6% in the third quarter of this year, the country's <a target="_blank" class="" href="https://www.stats.gov.cn/english/PressRelease/202410/t20241018_1957042.html">statistics bureau</a> announced as it touted a "stable growth trend." This was higher than the 4.5% growth forecast that economists polled by Reuters had expected but lower than the 4.7% recorded in the second quarter of the year.<a target="_blank" class="" href="https://stcn.com/article/detail/1356778.html">Sheng Laiyun, the deputy head of China's statistics bureau,</a> told reporters the bureau is confident of hitting the country's official GDP growth target for the year of around 5% based on the trend of economic stabilization and recovery seen in September.China's third-quarter GDP brings growth in the world's second-largest economy to 4.8% through the first three quarters of this year. That puts it at "striking distance" to hit its full-year growth target, wrote Lynn Song, the chief economist for Greater China at <a target="_blank" href="https://think.ing.com/articles/chinas-3q-gdp-beat-should-keep-growth-target-in-striking-distance/">ING.</a>September's retail sales figures were also promising, as they rose 3.2% from a year ago to a four-month high. It was also higher than the 2.5% growth economists polled by Reuters had expected.Meanwhile, industrial production in September grew 5.4% from a year ago — higher than the 4.5% economists had forecast.Even so, some analysts are not convinced the economic data release signals a convincing recovery."We would downplay the importance of better-than-expected key economic indicators in September given that the structural weakness in the property and household sectors remains largely unaddressed," wrote Betty Wang, the lead economist at Oxford Economics, in a note on Friday.In September, China's new home prices fell 5.8% from a year ago — the fastest pace since May 2015, according to <a target="_blank" class="" href="https://www.reuters.com/markets/asia/china-new-home-prices-fall-fastest-pace-since-2015-2024-10-18/">Reuters</a> calculations based on official data."The property market unsurprisingly remains the biggest drag on China's growth," wrote Song, adding that stabilization in the real estate market remains "elusive."<h2 id="be1d62f1-13f0-4ff7-949a-fa2fb1c30260">The People's Bank of China to the rescue</h2>Also on Friday, markets got a shot in the arm as <a target="_blank" class="" href="http://www.pbc.gov.cn/goutongjiaoliu/113456/113469/5481032/index.html">the People's Bank of China</a> pulled the trigger on two funding programs that stand to inject as much as 800 billion Chinese yuan, or $112.6 billion, into its stock market.These programs — a share buyback and a swap facility — were first announced in <a target="_blank" class="" href="https://www.businessinsider.com/china-economy-aggressive-monetary-stimulus-interest-rate-rrr-2024-9">late September</a> in a package of measures to support the stock market.PBOC's governor also signaled more interest rate cuts at a <a target="_blank" class="" href="https://www.reuters.com/markets/asia/china-cenbank-chief-warns-against-any-illegal-fund-flows-into-stock-market-2024-10-18/">financial forum on Friday.</a>The central bank's announcements on Friday boosted market sentiment, sending China's benchmark <a target="_blank" class="" href="https://markets.businessinsider.com/index/csi-300">CSI300</a> to close 3.6% higher. Hong Kong's Hang Seng Index also closed 3.6% up."The market is in a bad-news-is-good-news mode, as weak data implies more stimulus ahead," Larry Hu, the head of China economics at Macquarie Group, wrote.China's economy is being dragged by factors including a property crisis, high youth unemployment, and deflation. Especially concerning is <a target="_blank" class="" href="https://www.businessinsider.com/china-economy-weak-domestic-demand-factory-activity-amid-strong-export-2024-7">depressed consumer sentiment</a> as people prefer saving over spending in the current downturn.China has made frequent mentions of support and stimulus measures in recent weeks in an attempt to shore up flagging sentiment after years of negative news and after a massive rally last month ran out of steam."I think they are really trying to underpin growth," Rajiv Biswas, an international economist who's also the author of "<a target="_blank" rel="nofollow sponsored noindex" class="" href="https://affiliate.insider.com?h=2252c62746e53e506c655ce3df395bcea3ecbee5e1b11653f5e13361d3be9338&amp;postID=6711e994e5b54083005dea1d&amp;postSlug=china-economy-3q-gdp-growth-stock-market-stimulus-2024-10&amp;site=bi&amp;u=https%3A%2F%2Fwww.amazon.com%2FAsian-Megatrends-Rajiv-Biswas%2Fdp%2F1137441887">Asian Megatrends</a>," told Business Insider.He added that he expects Beijing to continue to do more to support growth so the economy can enter 2025 on better footing."We expect the policy coordination between monetary and fiscal policy will be stepped up in the following quarters. This should cushion the downside risks in the economy," wrote Oxford Economics' Wang.

China just triggered more stimulus measures, even as it says its economy is showing 'stable growth'

<ul class="summary-list"><li>The Small Business Administration ran out of funding for its disaster loan program on October 15.</li><li>The lapse could slow recovery efforts by small businesses damaged by hurricanes Helene, Milton.</li></ul>Locally owned businesses in places like Asheville still reeling from Hurricane Helene were hit with another setback this week.The Small Business Administration said on October 15 that its disaster loan program had run out of money. While the agency is still accepting applications for aid, it can't make loans until Congress approves more funding. That is likely weeks away, because Congress isn't expected to return until after the November election.The delay is unacceptable, said Kit Cramer, president of the Asheville Chamber of Commerce that represents more than 1,500 businesses. She worries it will slow down the pace of recovery for artists, breweries, and other local shop owners who sustained devastating property damage. Many of them count on the fall tourism season to earn enough money to make it through the less-busy winter months."The vast majority of my membership is small, unique businesses that bring beauty to living here," Cramer said. "That also means they don't have deep pockets. They want to keep paying employees, but it'll be hard. Some already had federal loans from the Covid period that they're paying off."Cramer added that local business owners are also discovering that their insurance policies don't have very comprehensive coverage.The SBA offers business and nonprofit owners low-interest loans up to $2 million for property damage that isn't covered by insurance and economic losses due to the disruption.The SBA said it has received some 37,000 applications from survivors of Hurricane Helene so far. More than 700 loans totaling $48 million have been approved. For Hurricane Milton, the SBA has already received more than 12,000 applications.The SBA's funding lapse comes two weeks after President Joe Biden <a target="_blank" href="https://www.businessinsider.com/fema-helene-milton-relief-funding-congress-disaster-victims-2024-10">warned lawmakers about the rapidly depleting funds</a> and urged Congress to reconvene. FEMA has said it has enough money for immediate disaster relief efforts following Hurricanes Helene and Milton, but the agency might have to stop funding longer-term recovery projects as soon as January without additional money from Congress.House Speaker Mike Johnson, a Republican from Louisiana, said that Congress is tracking the hurricane damage closely and will have a more accurate picture of the financial needs next month. He expects bipartisan support for additional funding when lawmakers return to Washington on November 12.In the meantime, Biden administration officials and business leaders are encouraging people to fill out applications for SBA disaster loans."SBA will continue to support homeowners, renters, businesses and nonprofits in processing their applications to ensure they receive assistance quickly once funds are replenished," Isabel Casillas Guzman, the administrator of the SBA, said in a statement.The SBA has a site in downtown Asheville at the Chamber of Commerce building and is working to set up other stations in the region to help people apply for aid, a spokesperson said.Cramer said the region has never experienced such a catastrophe, which means this is the first time many residents are navigating disaster relief programs. The communities are learning as they go, but also are still focused on getting clean water and helping their neighbors.Cramer lives in the mountain town of Swannanoa, North Carolina, where mudslides have swallowed roads, bridges, and homes, and power remains spotty. She had some roof damage and still doesn't have much running water, but said she is grateful her house wasn't washed away.Are you a business owner, homeowner, or renter affected by the SBA's pause in disaster loans? Contact <a target="_blank" href="mailto:cboudreau@insider.com">cboudreau@insider.com</a>.

The SBA can't help business owners hit by Helene, Milton until Congress comes back post-election

<ul class="summary-list"><li>China's economy grew 5.3% in the first quarter of 2024, surpassing analyst expectations.</li><li>Despite this, March retail sales and industrial output fell short of forecasts.</li></ul>China reported robust economic growth for the first quarter of 2024.The world's second-largest economy grew 5.3% in the first quarter of this year from a year ago, according to the <a target="_blank" href="https://www.stats.gov.cn/english/PressRelease/202404/t20240416_1954583.html">National Bureau of Statistics</a> — beating the 4.8% growth analysts polled by <a target="_blank" href="https://www.bloomberg.com/news/live-blog/2024-04-16/china-quarterly-gdp-key-data">Bloomberg</a> had forecast and the <a target="_blank" href="https://www.stats.gov.cn/english/PressRelease/202401/t20240117_1946605.html">5.2% growth</a> it chalked up in the fourth quarter of 2023."We have got off to a solid start," Sheng Laiyun, the NBS's deputy director, said at a press briefing in Beijing, according to Bloomberg. He said industry was an important contributor to growth, contributing to more than one-third of first-quarter growth.Louise Loo, the China economist at Oxford Economics, wrote in a note on Tuesday that China's economy was also supported in the first quarter by consumer spending for the Lunar New Year holidays in February.Despite the rosy figures, a closer look at the figures indicates there's still pain ahead.March retail sales rose 3.1% from a year ago, missing Bloomberg forecasts of 4.8% growth. Industrial output for March also missed forecasts, coming in at 4.5% — well below the 6% predicted by analysts."'Standalone' March activity indicators suggest weakness coming through post-Lunar New Year," Loo said.In particular, China's property market continued to be in the dumps amid a <a target="_blank" href="https://www.businessinsider.com/china-economy-property-crisis-vanke-get-uglier-analyst-charlene-chu-2024-3">debt crisis</a>, with first-quarter <a target="_blank" href="https://www.stats.gov.cn/sj/zxfb/202404/t20240416_1954590.html">new home sales</a> by value tanking nearly 31% from a year ago.Notably, the data didn't include China's youth-unemployment rate, which hit a record high of 21.3% in June 2023 before Beijing <a target="_blank" href="https://www.businessinsider.com/china-economy-crash-youth-unemployment-rate-labor-market-atlantic-council-2024-2">revamped the methodology</a> for the metric to exclude full-time students.<h2>China is in a 'two-speed economy'</h2>China's data dump on Tuesday reflects the country's changing economic landscape.China's economy has traditionally relied on growth from real estate and lower-cost manufacturing. Beijing is now trying to pivot to <a target="_blank" href="https://www.businessinsider.com/china-economy-new-growth-areas-electric-vehicles-batteries-solar-property-2024-1">three new drivers</a> in the green sector: electric vehicles, solar cells, and lithium-ion batteries.This has created a "<a target="_blank" href="https://www.businessinsider.com/china-two-speed-economy-sectors-thriving-new-three-green-sustanability-travel-2024-2">two-speed economy</a>" in which some sectors are doing well — but still aren't enough to offset the massive slump in the property sector, which accounts for about <a target="_blank" href="https://www.chinadaily.com.cn/a/202401/29/WS65b6ff1ba3105f21a507ec78.html">one-quarter of China's GDP</a>."The recent economic recovery has been driven by exports. I think it is a two-speed economy," said Raymond Yeung, the chief China economist at ANZ, according to <a target="_blank" href="https://finance.yahoo.com/news/instant-view-chinas-q1-gdp-022520387.html">Reuters</a>. "Domestic demand is still weak, but exports are good."Yeung said he expected China's economy to continue on a similar path in the second quarter of the year.Oxford Economics' Loo meanwhile expects headwinds to China's second-quarter growth as household spending normalizes and as inventory build-up is released onto the market.China has a <a target="_blank" href="https://www.businessinsider.com/china-economy-two-sessions-growth-goal-challenging-economists-2024-3">growth target</a> of about 5.0% this year.

China's GDP rose 5.3% in the first quarter, but it doesn't mean the economic pain is over

Japan's long-comatose economy is finally showing proof of life.After a catastrophic real-estate implosion in the early 1990s, the country's economy spent the next three decades shrinking. Households and businesses had to spend their money paying off debt, which prevented them from investing or starting new ventures. Wages were stagnant. And the economy slid from the world's second largest to its fourth. Animal spirits were neutered.Eight years ago, policymakers tried to bring them back by taking interest rates into negative territory. For a while, it was slow going. But Japan's economy — the long-unconscious patient — recently started to wiggle its toe. Japan's labor unions in March scored the biggest wage increase for workers in decades. The <a target="_blank" href="https://markets.businessinsider.com/news/stocks/aisstocks-japan-nikkei-225-index-recession-economy-record-high-advantest-2024-2?_gl=1*1u9dk3n*_ga*NzQwMzc4NTk2LjE2ODEyMzgzMzQ.*_ga_E21CV80ZCZ*MTcxMTg0MDgzMi45NjkuMS4xNzExODQwOTE2LjAuMC4w">country's stock market is ripping</a>; the Nikkei recently exceeded the <a target="_blank" href="https://markets.businessinsider.com/news/stocks/japan-stock-market-outlook-record-highs-this-year-1989-peak-2024-1">all-time highs it set 34 years ago</a>. Analysts at Goldman Sachs are telling clients there's still more upside to be had as corporate-governance reforms and a new era of sustainable inflation take hold. The <a target="_blank" href="https://www.businessinsider.com/japan-central-bank-raises-interest-rates-17-years-2024-3">Bank of Japan this month hiked interest rates</a> above zero for the first time since 2007, a sign of confidence in the country's recovery.This bounce back has led to some mild cheering in the US, mostly confined to Wall Street backslaps and calls of "<a target="_blank" href="https://www.businessinsider.com/bloomberg-report-on-great-quarter-guys-2015-4">great quarter, guys</a>" as East Asia portfolios grow. But in China, the reemergence of Japan from this extended malaise is being watched with close concern.Like Japan in the 1990s, China is now staring down <a target="_blank" href="https://www.businessinsider.com/us-china-economy-housing-market-2008-bust-crash-real-estate-2024-2">a property-market collapse</a>. Real estate once accounted for 20% to 30% of the country's GDP, and all aspects of China's economy — local governments, households, the banking system — depend on money from the <a target="_blank" href="https://www.businessinsider.com/china-economy-property-crisis-vanke-get-uglier-analyst-charlene-chu-2024-3">property market to survive</a>. After decades of overbuilding and speculation, this massive debt pile is coming due. This is what we now recognize as a "balance-sheet recession," a term the Nomura economist Richard Koo coined in 1997 to describe Japan's economic sluggishness as society paid down debt from its property-market collapse. Now, Koo says, Chinese academics and policymakers are flocking to Japan to glean some kind of wisdom from the country's experience."I tell them there's a big difference between Japan 30 years ago and China now. When we got into this balance-sheet recession, no one knew what kind of disease we contracted," Koo told me. "We were all lost for a long time."At a glance, the encouraging news from Tokyo should give Beijing hope. It shows that where there is a will, in even the direst economic circumstances, there is a way. But a closer look at the road Japan took to revive its economy darkens the picture. Japan's recent success stems from a decadeslong effort from policymakers, careful negotiations with its trading partners, and the strange conditions Japan's economy found itself in along the way. All of this will be nearly impossible for Beijing to re-create — at least, not without pissing off policymakers from Brussels to Brasília.<h2>What happened in Japan</h2>The difficulty of digging out of a crisis like Japan's is that the factors that contributed to the <a target="_blank" href="https://www.businessinsider.com/japanese-deflation-and-population-shrinkage-2011-1">downturn are self-reinforcing</a>. When real-estate values collapsed, Japanese households saw their wealth take a nosedive, which pushed them to save more and focus on paying down debt. With fewer consumers going out and spending, companies slashed prices to woo what few yen were going around, which <a target="_blank" href="https://www.businessinsider.com/why-japans-deflationary-suicide-is-a-complete-myth-2010-8">led to economywide deflation</a>. This has the perverse incentive of making saving seem more attractive: Why invest in something or buy something now when it may be cheaper in a year or two? Corporations had to stay innovative, pay down debt, and fight for consumer dollars all at once, but those tight margins meant there was little room for worker raises — further constraining what households had to spend. The whole economy seemed stuck in a trap. Eventually, the Japanese government and the Bank of Japan ramped up their efforts to kick-start the economy. The bank cut interest rates into negative territory, effectively forcing people to pay money to keep cash in their savings. And Shinzo Abe, Japan's former prime minister, launched a campaign of "Abenomics" that included massive stimulus packages designed to inspire business and household spending. After all this hard work, Japan is starting to show signs that better days are ahead. Koo says executive culture is shifting toward more of an appetite for debt — more risk — and that means more investment in new projects. He compared the C-suite's caution to the skepticism Americans who lived through the Great Depression in the 1930s felt toward debt — a form of PTSD. But, slowly, things are changing."I think it's a good sign," Koo told me, "but Japanese are very cautious people, especially compared to the US."One reason animal spirits are stirring in Japan is that the <a target="_blank" href="https://markets.businessinsider.com/news/stocks/japanese-yen-faces-pressure-as-officials-maintain-accommodative-stance-1033208969">yen has been getting crushed</a> against other major currencies since 2022. As a country's <a target="_blank" href="https://www.businessinsider.com/visit-japan-economy-weak-yen-dollar-foreign-exchange-rate-tourism-2023-12">currency becomes cheaper</a>, its exports become more attractive to the rest of the world — which helps explain why Japan's exports hit a record in 2023 — and makes corporations that depend on exports look as if they have healthier balance sheets."This has made Japan attractive for foreign investors, and the stock market has done well," Koo said. But a weaker yen reduces the purchasing power of those using it domestically."For average Japanese people living in Japan, this has not been great news at all," he told me. "What's being said outside Japan and how it feels inside are very different."Tokyo knows it's not out of the woods yet, but economists largely agree that early this year was the time for Japan to strike — to pull itself out of negative interest rates, even if the economy is still finding its footing."Initially driven by cost-push factors, inflation is becoming demand-driven with the output gap closed and labor shortages intensifying," researchers at the International Monetary Fund wrote in a recent report. The biggest danger, they said, is that inflation has eaten up what little growth the country has. Luckily, though, the rest of the global economy seems like it's in shape to support the country by buying Japanese goods and mobbing the country with a record number of tourists. That all must hold if we're to see Japan close the chapter on its economic fall from grace. And so, toward the end of Japan's most arduous phase of debt repayment, as companies looked healthier and the stock market much cheaper thanks to the currency, the world stepped in with more cash. None of it was a pretty process, but restructuring never is.If China tried to replicate the procedure, though, it would look even uglier.<h2>How Beijing will handle it</h2>I don't need to tell you that China and Japan have very different social and political systems. But it's important to recognize that China is entering its real-estate crisis under very different economic circumstances: GDP per capita is about $12,800, compared with $41,266 in Japan when its property bubble burst. There are some useful comparisons, however. When Japan entered its downturn, its relative economic size compared with the US was similar to China's now. Both are confronting what it means to manage a debt-laden economy losing its dynamism while demographic changes result in a shrinking workforce. These are long-term, structural problems with solutions we're just now coming to understand. But now — just as some hard-line Japanese believed back in the 1990s — <a target="_blank" href="https://www.businessinsider.com/china-xi-jinping-growing-threat-world-economy-stock-market-crash-2022-10">Chinese policymakers think </a>they'll weather this because their economy has room to grow, can mobilize its domestic market, and will find plenty of trading partners even if its relationship with the US has soured.When the Japanese economy crashed in 1990, it took the government years to come to the conclusion to enact the fiscal stimulus that economists now consider the first line of defense against a deflationary shock. Early efforts to stimulate were wishy-washy. For example, a generous fiscal package in 1995 was countered with austerity in 1996 and 1997, according to analysts from the Peterson Institute. It took years for policymakers to get their mix right."The Chinese are talking about it every day, they understand what kind of disease they contracted," Koo said. "Whether that translates into a speedy, sufficient, and sustained stimulus, we haven't got there yet."While it took Japan years to come around to the idea of stimulus, China may never get there. <a target="_blank" href="https://www.businessinsider.com/china-xi-jiinping-future-tech-global-economy-semiconductors-military-failing-2022-9">Xi Jinping has shown few signs</a> he's willing to rain money down on the country's starved local governments or even on households to spur consumption. He doesn't really believe in handing money to consumers to let them do whatever they want with it. Instead, Xi's solution is to get China's monumental manufacturing machine to make higher-value goods. This continues the state's control over the economy since the state directs banks where to lend and, in Xi's opinion, sets China up to have the kind of economy that would rival other world powers. So Beijing is going all in on building the hard goods of the future: <a target="_blank" href="https://www.businessinsider.com/china-xi-jinping-crush-tesla-elon-musk-american-ev-industry-2024-2">electric vehicles</a>, semiconductors, cellphones, computer screens. He wants Chinese companies to buy all those things from Chinese manufacturers as well, creating an ecosystem of technology that would dominate markets. And Xi wants the rest of the world to buy these goods from that ecosystem. This is where trade conflict comes in. The first time China became a manufacturing juggernaut, in the early 2000s, the world embraced it. Policymakers thought that integrating China into the global economy would make it a more open society and that the wins for some US companies would outweigh the downsides for others. But we've found that wasn't the case. Instead, the world was hit by what economists now call the "China shock," which stripped the US of its manufacturing base and left whole communities without good jobs.Given this experience, any whiff of a new China shock will almost certainly result in the world pushing back. Policymakers are unwilling to allow even more crucial productions and jobs to be shipped off and out, leaving angry voters and instability behind. Japan's leaders mostly ignored nationalist hard-liners who were angry at the US in the 1990s and focused on having a good relationship with the US, as it needed the richest country in the world to buy its goods. China is taking a different tack: Even as Xi invites US leaders to China to talk about how open the country is, American brands are getting walloped, <a target="_blank" href="https://www.businessinsider.com/china-xi-jinping-hiding-bad-data-economy-debt-real-estate-2023-8">US offices have been raided by Chinese officials</a>, and financial firms and consultancies are moving out of China. Not even the Chinese stock market's veritable collapse over the past few months interests investors, with Goldman Sachs warning clients to stay away. There's cheap, and then there's dangerous.Because of these adversarial circumstances, it's unclear how much the world will be able to buy what China is selling at any price. This is one of Beijing's biggest stumbling blocks. Tokyo was able to pull itself off the mat in part because when the yen fell, the world was OK with that. Japan, after shutting down nuclear plants, started importing energy, and there was less of a trade imbalance between it and the rest of the world. China's balance of trade is still skewed toward exports, which means if the yuan falls, its goods get cheaper and can flood markets.So I don't want to imagine the screeching from Washington if there's even a hint that Beijing is allowing the yuan to depreciate in order to sell us more stuff.Even without a currency war with Beijing, the world is building defenses against another wave of Chinese goods. Brasília just launched an antidumping investigation into whether China is flooding Brazil with cheap goods. Turkey recently tightened regulations on EVs shipped from China. And China's EV exports to the European Union started the year down almost 20% after regulators announced an investigation into Beijing's financial support of the industry.The most crucial difference between China's balance-sheet recession and Japan's may be emotional. Throughout Japan's recovery, markets worked from a cooperative ideological mindset, believing free trade was good. As China begins its recovery, that cooperation has turned adversarial. Ultimately, that may mean the difference between China continuing its rise or <a target="_blank" href="https://www.businessinsider.com/china-xi-jinping-economy-real-estate-debt-bust-american-companies-2023-10">staying stuck in a debt trap</a>. In the end, technology may not save China if it doesn't have the right friends to buy it all.<a target="_blank" rel="" href="https://www.businessinsider.com/author/linette-lopez">Linette Lopez</a> is a senior correspondent at Business Insider.

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