China and US elections reiterate the durability of the onshoring theme.
Source: Goldman Sachs
China’s National Team Is Back at Work as Stock Trading Resumes – Bloomberg
Several exchange-traded funds in China tracking the nation’s stocks saw a surge in turnover on the first trading day after the Lunar New Year holiday, a likely sign that state-backed funds continue to support the market. Traded values of China AMC CSI 500 ETF and Harvest CSI 500 ETF both surged to records, while those of Tianhong CSI 500 ETF, BOC International CSI 500 ETF and CIB CSI 500 ETF were higher than their average levels.
Direct foreign investment into China slumps to 30y low.
Foreign firms only added $33bn to their FDI liabilities, the lowest since 1993, indicating a lack of confidence Source: Bloomberg, HolgerZ
📉 China Yields Staying Stuck at Historic Lows as PBOC Slashes Mortgage Reference Rate!
China has taken bold measures to uplift its struggling property sector by implementing its most substantial reduction in a key mortgage rate to date. The five-year loan prime rate saw a notable cut of 25 basis points, plummeting to a historic low of 3.95%. This move, the largest decrease since the rate's overhaul in 2019, underscores China's commitment to stimulating economic growth through targeted measures. The decision to lower the mortgage reference rate is poised to have far-reaching effects, potentially unlocking opportunities for further economic support initiatives. By enabling more cities to lower their minimum mortgage rates, the rate cut aims to revitalize demand in the sluggish housing market. Moreover, it seeks to address the persistent property crisis, which has cast a shadow on overall economic growth. However, despite these efforts, it is not expected that the rate cut will significantly boost homebuyers' sentiment as home prices are still falling in most cities and wage growth is tepid. Following cut's announcement, market response was subdued, with equities and USDCNH experiencing minimal changes, while 10Y onshore government bond yields saw only slight decreases. How will China emerge from this slow economic agony? Source: Bloomberg
Nikkei 225 hit 38k level this week. Last time it happened was 1989...
See below the level of other indices at the time... Source. Bloomberg
India is one of the few markets that is outperforming the US rather handily
Source: Bloomberg
Japan enters recession with Nikkei about to hit All Time High as the yen trades at 150
The Nikkei has more than doubled from the covid lows and is about to breach its all time bubble highs set in in the last days of 1989... and moments ago Japan entered a recession. In fact, From its generational low set a decade ago, the Nikkei has almost quadrupled even as Japan's economy has slumped into recession three times! Once the second largest economy in the world, Japan reported two consecutive quarters of contraction on Thursday — falling 0.4% on an annualized basis in the fourth quarter after a revised 3.3% contraction in the third quarter. Fourth quarter GDP sharply missed forecasts for a 1.4% growth in a Reuters poll of economists. Source: CNBC, www.zerohedge.com
The World’s Largest Consumer Markets in 2030 🌏
Source: Visual Capitalist
