The latest round of Chinese manufacturing numbers come out tonight at 8 ET, before the Shanghai open. A disappointment could leave an already shaky market on the run.
Consensus expectations are for the November purchasing managers index (PMI), a key gauge of industrial activity, to edge up to 54.80 from October's 54.70.
Last month, traders loved the PMI for revealing that the Chinese export economy remains alive and well. But this time around, too strong a number could spark fear that Beijing will have to move in before the end of the year to raise interest rates or otherwise cool the economy before it generates truly out-of-control inflation.
And of course, too low a number -- anything under the key 50 level that indicates expansion, for example -- could send traders running for the other exit.
With that in mind, a flat reading may be best.
The Shanghai market itself seems to be hanging on this number with bated breath. The last few weeks have pushed major Chinese stock gauges above the key 200-day moving average, but last night's trading crashed back through that level before bouncing back.
Watch 2790 on the Shanghai Composite tonight. Any serious break below that point means the hard-won 200-day support line has turned into resistance. But if the market stays above that level, it could bode well for all your favorite Chinese assets, from FXI to individual stocks like BIDU and even relatively unloved names like TSL .
And ultimately, because China remains a significant bellwether for emerging markets in general, as Shanghai goes tonight, so will EEM go tomorrow.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.