👏 China's back in business

What’s going on here?

Despite usually refusing to see eye to eye, two indexes just agreed on one thing: China’s manufacturing sector seems to be back in business.

What does this mean?

China’s private Caixin purchasing managers’ index (PMI) measures the level of activity in the manufacturing sector. That puts it right at the top of economists’ reading lists: China’s economy relies on manufacturing and exporting, after all. Well in March, the Caixin reading picked up for the fifth month in a row – the longest run in two years. What’s more, the country’s official manufacturing PMI broke its five-month slump, landing at its highest point in a year. That means both the private and public readings came in better than expected, a promising sign after months spent moving in different directions.

Why should I care?

Zooming out: 99 problems, even if manufacturing isn’t one.

China’s government had predicted (or at least, optimistically hoped) that the economy would grow by 5% this year. But while that manufacturing data is moving in the right direction, many experts believe the government will still need to put in a few extra shifts to reach that target – especially because the property market is far from stable. Chinese authorities are worried about foreign trade opportunities, too, now that countries like the US are favoring locally produced products over Chinese ones. That could run down orders on some of China’s biggest sellers – like electric vehicles, for example.

The bigger picture: India versus China.

China and India’s stock markets moved in tandem for around two decades, up until late 2021. But investors have piled into Indian stocks over the last year, making bets on the country’s young, expanding workforce and leaving China’s languishing stocks on the sidelines. So now, the two markets are less in sync than ever. That said, China’s latest data might turn investors’ heads by promising potential while stocks are still going cheap.

What’s going on here?

Amazon has made plans to spend almost $150 billion on data centers, committed to leading the AI charge.

What does this mean?

AI systems might not have any use for humans in the future, but they will need data centers to process their faux brainwaves. So determined to be the go-to computing power for the smarts of the future, Amazon plans to spend nearly $150 billion on data centers in the next 15 years. The tech giant plans to use the cash to set up centers in the US, Saudi Arabia, and Malaysia, building up worldwide coverage that could help it maintain its edge over Microsoft and Alphabet in the cloud services market.

Why should I care?

For markets: Connect the lot.

Amazon will be relying on the business cards of industry experts as it expands its data empire. That includes companies that design and produce the chips that data centers run on, like Nvidia and Applied Materials, as well as companies that specialize in infrastructure and networking equipment. Vertiv, for one, supplies complex infrastructure systems, including a powerful liquid cooling technology that keeps servers from overheating. And it pays to have friends in the right places: plenty of the companies involved in building AI-focused data centers have seen their share prices rewarded for their work.

The bigger picture: Amazon has green fingers.

Only a few companies have fully leaned into generative AI, but Goldman Sachs believes there are early signs that those embracing the tech are already becoming 25% more productive, on average. Amazon will need to be prepared for when the rest of the corporate world clocks on, then. The tech firm’s existing data centers have already made it the biggest business buyer of renewable energy – part of Amazon’s pledge to fuel its business with only renewable energy by 2025.