Industrial Production and Fixed Asset Investment Slows

I covered November monetary data here: Lending Spikes in November
November real estate investment here: November Real Estate Growth Slowest in 2014, Land Sales Growth Shrinks

Fixed asset investment was down slightly in November. Private fixed asset investment is in yellow; total fixed asset investment in blue. Private investment was 64.6% of total investment in November.

Digging into the numbers reveals the same trend in the other data sets. November data is the second weakest for the year after September. The October spike is a bounce, not a trend yet. Private fixed asset investment slowed to 14.9% in November; it was 11.7% in September. Below trend growth is the story of 2014 and 2015 will likely open with a big drop in growth that will "surprise" anyone watching the year-to-date cumulative figures.

Industrial production continues to slow. Looking at the breakdown of data from the report, the real estate slowdown is still having a big impact. Cement production fell 4% in November; plate glass contracted 6.3%. More concerning for the broader economy is the 4.5% drop in auto production, as well as the 0.6% growth in electricity production, which is now only up 3.9% ytd in 2014.

The drop in oil prices has further to go if the Chinese economy continues to slow.

Crude Crash Set To Continue After Arab Emirates Hint $40 Oil Coming Next

“We are not going to change our minds because the prices went to $60 or to $40,” Mazrouei told Bloomberg at a conference in Dubai. “We’re not targeting a price; the market will stabilize itself.” He said current conditions don’t justify an extraordinary OPEC meeting. “We need to wait for at least a quarter” to consider an urgent session, he said.

And with OPEC’s 12 members pumped 30.56 million barrels a day in November, exceeding their collective target for a sixth straight month, according to data compiled by Bloomberg. Saudi Arabia, Iraq and Kuwait this month deepened discounts on shipments to Asia, feeding speculation that they’re fighting for market share amid a glut fed by surging U.S. shale production.

The above only focuses on the (unchanged) supply side of the equation - and since the entire world is rolling over into yet another round of global recession, following not only a Chinese slowdown to a record low growth rate, but also a recession in both Japan and Europe, the just as important issue is where demand will be in the coming year.

Japan's election could throw some logs on the fire.

Ruling coalition secures 2/3 majority

The Liberal Democratic Party led by Prime Minister Shinzo Abe and its coalition partner, Komeito, garnered 325 seats, one more than a two-thirds majority, in the 475-seat Lower House.

A two-thirds majority in the chamber will allow the re-enactment of bills rejected by the Upper House. A two-thirds majority in the Lower House also makes it possible to propose amending the Constitution.

Prime Minister Abe told NHK that he will give top priority to the economy and pursue economic diplomacy to heighten Japan's status. He said he will enact legislation regarding security in the next Diet session to protect the people's lives.

Remilitarization and yen devaluation.