Citi, JPMorgan, BofA and Morgan Stanley have collectively reduced their exposure to China by about a fourth since 2020
Source: Lisa Abramowicz, Bloomberg
US interest rate futures are beginning to shift back in the less dovish direction
Odds of 7 or 8 interest rate cuts in 2024 have halved this week. Also, odds of rate cuts beginning this month are down to just 7%. However, the base case still shows 6 rate cuts for a total of 150 basis points in 2024. This is double the 3 rate cuts forecasted at the Fed's latest meeting. Source: The Kobeissi Letter
While many economists and financial analysts look at the 1970s as a potential playbook for the current decade, the 1940s could be an interesting reference to consider as well
The 40s was a decade of war and high budget deficit and rising debt level in the US. Monetary policy was mainly about financial repression, i.e keeping rates low despite temporarily high inflation. Overall, it was positive for risk assets. Source: Win Smart, FRED
German inflation has accelerated again, at least the headline rate
CPI rose to 3.7% in December from 3.2% in November due to base effect. But Core CPI has fallen further to 3.5% in Dec from 3.8% in November. This means that core inflation is once again below headline inflation. Source: HolgerZ, Bloomberg
China’s central bank assets have surged by nearly $600B in the last 4 months
In yuan terms, this was the largest 4-month increase in the history of the data. The issue of a bloated government deficit and significant debt is not exclusive to the US; it resonates globally. Source: Tavi Costa, Bloomberg
Mark Zuckerberg sold nearly half a billion dollars of Meta shares in the final two months of 2023 after a 2y hiatus in which the company’s stock price hit its lowest in seven years
The Meta CEO sold shares on every trading day between Nov. 1 and the end of the year, unloading nearly 1.28mln shares for ~$428mln. On average, each sale took in $10.4mln. Source: Bloomberg, HolgerZ
How the economy works... An over-simplistic but accurate chart
Source: Markets & Mayhem
The Druckenmiller Recession indicator continues to plummet
Source: Win Smart, TS Lombard
