Displaying items by tag: US

Thursday, 31 October 2019 12:22

China Doubts US Trade Deal Possible

(Beijing)

Investors have been jolly lately about the progress made in the trade war. Ever since Trump’s announcement of a “phase 1” deal a few weeks ago, trade war concern has been diminishing, with markets rising accordingly. However, there was a reality check today as China made worrying comments, saying that they don’t think any long-term/substantial deal would be possible with Trump, and that they are even worried about him backing out of a simple short-term deal because of his “impulsive nature” (from Bloomberg).


FINSUM: Talk about throwing cold water on something. That said, none of these comments—positive or negative—mean too much. What ends up on paper matters more.

Published in Eq: China
Friday, 18 October 2019 09:44

China’s Weak GDP Growth Send Shockwaves

(Beijing)

China’s newest GDP data has just come in and it is shockingly weak. Third quarter GDP growth was the lowest in has been since the early 1990s and appears to show the sting of US tariffs. Growth was just 6%, a major sign of the weakening state of the global economy. That is the same level of growth as in the late 1980s, though China’s economy is now far larger. Those paying attention will know that China’s economy grew at around 7-8% per year since the Crisis.


FINSUM: So this is an admitted 6%. Beijing keeps very tight control of its economic data, so it is not inconceivable that the real number is actually lower.

Published in Eq: Asia
Thursday, 17 October 2019 11:07

The Bull Market Could Go On for Years

(New York)

Is the bull market winding down? Most people seem to think that is inevitable after such a long run. However, there are some contending the bull market could go on for years. The argument comes from Ciovacco Capital Management, which contends that by analyzing historical charts, the stock market looks poised for another breakout out, especially considering the Brexit deal, the US-China “phase one deal”, and the generally buoyant mood on Wall Street. Ciovacco says worries about China have been the biggest drag on performance, but that a lot of progress has been made, and one more piece of good news, such as the delay of December tariffs, could spark a big run by igniting “animal spirits”.


FINSUM: This is obviously highly speculative. However, it is a decent 30,000 foot view of where the market stands right now.

Published in Eq: Total Market
Friday, 11 October 2019 08:40

How the US Could Cause a Chinese Market Meltdown

(Shanghai)

The US is considering some new rules that could cause a stock market calamity in China. The government is considering putting new restrictions on US capital flowing to the Chinese mainland. The move is considered the third and worst-case-scenario stage for Chinese markets in the current trade war. In particular, the big risk is that MSCI de-lists Chinese stocks from its broader indexes, meaning all that capital would need to be pulled out. That amount is currently around $50 to $60 bn.


FINSUM: This is not hugely massive, but it is certainly enough to hurt markets on a technical front, but perhaps even more from a perception angle.

Published in Eq: Asia
Thursday, 12 September 2019 12:01

The Best Way to Play the End of the Trade War

(New York)

So let’s say you are in the bullish camp and think the US-China trade spat will be resolved soon. What is the best way to profit from that development? All stocks will likely rise, and bond yields will probably rise too. But where will the best gains be? How about small caps. The argument here may seem counterintuitive, but shows an evolution in thinking on the part of investors. At the start of the trade war, many thought small caps would do well as they are less exposed to international trade. However, thinking has changed and investors are now much more focused on which sectors are most exposed. This has led small caps to have a rough year compared to large caps, mostly because there are so many financial stocks in the small cap sector. That said, a resolution of the trade war would suspend downward pressure on rates and allow the sectors which have beaten up to flourish, offering disproportionate gains for small caps.


FINSUM: This is a fairly sophisticated argument based on the proportion of beaten up stocks that are in the small cap asset class. However, it does make a lot of sense.

Published in Eq: Total Market
Page 4 of 39

Contact Us

Newsletter

Subscribe

Subscribe to our daily newsletter

Top
We use cookies to improve our website. By continuing to use this website, you are giving consent to cookies being used. More details…