It's interesting that US earnings season starts off with Alcoa and YUM because both of those companies are seen as important bellwethers for global growth, and China in particular.
Obviously Alcoa is all about industrial demand, while Yum (via KFC) is a big play on the growing emerging market consumer.
Both reported yesterday, and both gave very different takes on what's going on.
Alcoa cut its global aluminum demand outlook, and specifically blamed China.
In a slide from its presentation, it specifically cited some very weak industrial action in China, especially on the heavy truck front.
Yum on the other hand, beat expectations, and said things were going swimmingly in China, with margins far outpacing expectations, while expansion plans remained intact.
This is just two datapoints, but this is some of that "rebalancing" people have been looking for: Industrials slowing. Consumers booming.
The story isn't perfectly "clean." Nike recently came out with weak profits in China, undermining the idea that the consumer is growing like gangbusters. But the point is that the Chinese economy is different (sometimes significantly so) depending on who you ask.
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