This chart shows that correlation between stocks and long duration bonds remain quite high
This is a regime change from previous decade and has implications for portfolio construction. Source: J-C Parets
Fast-fashion giant Shein has filed confidential paperwork for a potential public listing in early 2024
seeking a valuation of up to $90 billion (per Bloomberg), which would make the 15-year-old company more valuable than Lululemon and H&M combined. Established in China in 2008 as ZZKKO, Shein puts the fast in fast fashion: dropping as many as 10,000 new items on its website every day, producing items in small batches (50-100), and only ramping supply reactively for any products getting a lot of demand. Its wallet-friendly offerings — like earrings for less than 50¢ — have won over young consumers across the world, with its US customer base helping to catapult the company’s sales up 45% year-over-year, to $23 billion in 2022. Source: Chartr
Here's the list of the best performing IPO in the world so far in 2023 YTD
The world’s best-performing IPO stock this year is a little known Indonesian coal mining company that’s backed by one of Southeast Asia’s richest men. PT Petrindo Jaya Kreasi has soared more than 2,900% since it listed in March following a $25 million offering. Yet it still has no analyst coverage, is richly valued and has relatively low trading volumes. Counting Indonesian billionaire Prajogo Pangestu as its main shareholder, the company’s market value has grown by more than 25 times to $5.4 billion in just nine months. Indonesia has been one of the most vibrant markets for initial public offerings globally this year, partially helped by a boom in demand for renewable energy stocks. Petrindo, in particular, is among a cohort of Indonesian stocks that have posted unexplained gains and wild swings this year, reaping fortunes for their backers and leading to regulatory scrutiny. Source: Bloomberg, www.zerohedge.com
As we moved into 2024, one downside risk needs to be kept in mind:
tightening monetarypolicy cycle often operates with a lag. As shown on the chart below, stocks typically plunged many months after rates peaked in the past. Source. Bloomberg, Cheddar Flow
EQUITIES MOVE HIGHER AS BOND VOLALITY DROPS
Rates volatility joined the global volatility puke in November and we actually have the MOVE trading at the lowest levels since around mid September. Perfection vs SPX continues. Chart shows MOVE inverted vs SPX. Source: TME
Hedging demand has fallen sharply with the cost to protect against a market selloff down by around 10%, or one-standard deviation, tumbling to the lowest ever in data starting in 2013
Demand for tail-risk hedges that pay out in an equity fall as precipitous as 30% has also dropped and is hovering around the lowest level since March.- Bloomberg
Up again today. Index is up 8%. This group of Chinese stocks is up over 50% in just a few weeks
Source: David Ingles, Bloomberg
A gauge of early-stage small, mid-cap growth stocks in China has rallied 40% within just a few weeks
Source: David Ingles, Bloomberg
