Chinese trade data was well short of expectations. The country's exports dropped 3.1 percent in June, well short of market hopes for a gain of 4 percent, and the first decline since January 2012. Imports fell 0.7 percent as well; as if to reinforce the gloom, a customs spokesperson said "exports in the third quarter look grim."
Whether this is a more "accurate" read than other months (Chinese authorities are cracking down on money laundering schemes that may be impacting trade flows) is irrelevant: this is not good news for GDP figures, which will be released on Sunday night.
Chinese authorities are targeting 7.5 percent GDP growth. With Wednesday's figures, that number is starting to look like wishful thinking.
Back in the economic hall of mirrors, Shanghai stocks ended up 2 percent, its biggest one-day advance since March. Huh?
In theory, the stock market's advance could mean we are back to bad economic news being good news: speculation is afoot that the People's Bank of China (PBOC) will be more aggressive in providing stimulus.
1) Anyone having any doubt that there is plenty of money out there looking for investment should look at KKR, which announced it was raising $6 billion for an Asian fund. With the exception of Japan, Asia has notably under-performed the U.S. this year. KKR is obviously taking a longer-term view: last year they opened an office in Singapore. The long-term story, of course, is about the growth in consumer demand.
2) There is lots of debate on how rising rates will affect housing. This week's MBA mortgage report showed refinancing fell 4.4 percent week-over-week, down four weeks in a row. More importantly, purchase apps dropped 3.1 percent, the second weekly decline and a 4-month low.
However, the rate of decline is much less than in the previous two weeks. There is clearly some effect, but it's a little early to gauge how severe it is.
3) Another secondary? It's the second one this year for Restoration Hardware; shareholders announced they have raised the amount they are selling to 12 million shares, up from a previously announced 10 million. Recall that the stock jumped in May when shareholders sold nearly 10 million shares at $50. RH will not receive any proceeds from the sale.
The company went public (again) in November 2012 at $24, after being taken private by Catterton Partners in 2008. It closed yesterday above $77, but the bulk of the move came in two spurts: the secondary offering in May at $50, when the stock was trading at $40; then again in mid-June when it went from $60 to almost $70 overnight. At that time, the company announced better than expected results, and issued sales Q2 sales growth guidance of 28 to 39 percent, well above consensus.
RH is far and away the best performing stock in the home improvement category. They are expanding aggressively, and not just via stores but through product lines as well. They are creating product lines for Antiquities, kitchen and tablewares that will aggressively compete with Williams-Sonoma. In fact they have hired the former WSM President to run that new product line.
Yet two problems loom. One, the stock is pricey: it is nearing 50x 2013 earnings, at the far end of a premium for even high-growth retailers. Secondly, any slowdown in housing (hiring rates, the economy) will affect sales.
—By CNBC's Bob Pisani