IN GLOD WE TRUST
Incrementum AG· 2024-05-16 16:00
Group 1: Economic Trends - The US dollar-centric global monetary system is under increasing pressure due to geopolitical tensions and inflation dynamics[5] - Central banks have been forced to sharply raise interest rates to combat persistent inflation, which has led to painful market adjustments[5] - The Federal Reserve faces a critical decision: maintain restrictive monetary policy to lower inflation to 2% or risk triggering a severe recession[16] Group 2: Gold Market Insights - Gold prices are anticipated to break out as they have already reached all-time highs in various currencies, signaling potential growth in US dollar terms[51] - The gold/S&P 500 ratio indicates that gold is undervalued compared to equities, suggesting a potential tripling of gold prices if the S&P 500 remains unchanged[121] - The Bloomberg Commodity Index (BCOM) gained 13.8% in the previous year, indicating resilience in the commodity sector despite economic challenges[157] Group 3: Market Performance - In 2022, both stocks and bonds experienced double-digit losses for the first time in 42 years, with a 17.9% decline in a 60/40 portfolio[138] - The consensus estimate for S&P 500 earnings per share (EPS) is a modest decline of 1.56% for 2023, indicating overly optimistic market expectations[142] - The correlation between equities and bonds has shifted, suggesting that bonds may no longer serve as a safe haven during market stress[154]
Strained U.S. China Relations The Ripple Effect
Citi· 2024-05-08 16:00
Geopolitical Risks and Trade Dynamics - The initial response to heightened geopolitical risks is a reshuffling of trade flows rather than significant investments in new capacity[1] - Reliance on Chinese imports for many Western allies fell only after the Russia-Ukraine war[2] Friendshoring and Supply Chain Reconfiguration - Friendshoring is slow and costly, with little evidence of material shifts in trade with geopolitical allies post-2018–2019 U.S.–China tariff war[10] - The push for friendshoring is expected to intensify, although actual foreign direct investment (FDI) flows have not notably increased due to high interest rates[13] Industrial Policies and Trade Measures - The U.S. is aggressively reshoring chip production, with South Korea, Taiwan, and China accounting for about 70% of global semiconductor production[15] - Trump's proposed tariffs are seen more as bargaining chips, with a likely outcome of 15% tariffs and limited retaliation options for China[7] EU's Trade Stance and Economic Implications - The EU is the largest trading partner for both the U.S. (18.5% of total goods trade) and China (13%), but has made only marginal shifts in reliance on Chinese imports[21] - European officials are expected to push back on Chinese trade, recognizing the systemic issues posed by China's unbalanced growth strategy[32]
thoughts from the road
KKR· 2024-04-29 16:00
Economic Outlook - China's economy has bottomed, with easier year-over-year comparisons and a reduction in the 'scarring effect' from COVID-19[1] - Trade within Asia is increasing, with 58% of Asian trade occurring within the region by 2021, projected to rise another 10%[17] Growth Drivers - The New Economy, including the Green Economy, AI, and industrial automation, constitutes about 20% of China's economy but accounts for 55% of GDP growth[3] - The green economy is growing at approximately 20% year-over-year, despite being only 10% of China's GDP[51] Challenges - The real estate sector remains overbuilt, with housing starts down nearly 60% from their peak, indicating a significant correction still in progress[32] - Savings as a percentage of household income have increased to 32.5%, up from 29.1% before COVID, indicating a need for restored consumer confidence[37] Investment Sentiment - Many investors are considering reducing their exposure to China from 10-12% to 5-6% due to uncertainty, despite improving fundamentals[47] - The potential for significant capital market reforms exists, which could attract both domestic and foreign investment[79] Policy Recommendations - Emphasis on supply-side reforms, urbanization incentives, and improved clarity around housing market reform is crucial for economic stability[76] - Modernizing the asset management industry is necessary to lower the cost of capital and enhance competitiveness on the global stage[80]
Growth of Indian services exports hits series peak in March
HSBC· 2024-04-22 21:00
Growth Indicators - The HSBC India Services Business Activity Index rose from 60.6 in February to 61.2 in March, indicating one of the strongest growth rates in over 13-and-a-half years[2] - New export business increased at the fastest rate since the series began in September 2014, with significant gains reported from various regions including Africa, Asia, and Europe[2] - The Composite PMI Output Index increased from 60.6 in February to 61.8 in March, marking the second-strongest upturn in over 13-and-a-half years[27] Employment and Capacity - Employment in the services sector rose at the joint-fastest rate since November 2022, driven by increased demand and capacity pressures[2] - The increase in pending workloads was reported for the twenty-seventh consecutive month, reaching the highest level since early 2023[14] Price Pressures - Input costs rose at a marked rate, faster than in February, contributing to intensified price pressures across the sector[2] - Selling price inflation reached its highest level since July 2017, primarily due to the acceleration in the service economy[14]
Indian private sector output rises at faster pace amid pick-up in sales growth
HSBC· 2024-04-22 21:00
Economic Growth Indicators - The HSBC Flash India Composite PMI Output Index rose to 62.2 in April from 61.8 in March, indicating the fastest rate of increase in aggregate business activity since mid-2010[4] - The Manufacturing PMI Output Index was reported at 63.2, slightly down from 63.3 in March, while the Services PMI Business Activity Index increased to 61.7 from 61.2[9] Sector Performance - Economic growth was broad-based, with the manufacturing sector experiencing the sharper increase, although at a softer rate compared to March[4] - Private sector sales expanded for the thirty-third consecutive month, marking the quickest pace in nearly 14 years[4] Employment and Capacity - Job growth was notably stronger in the manufacturing sector, with manufacturers increasing staffing levels to the greatest extent in nearly 18 months[7] - Despite robust increases in new business, pressures on capacity remained mild, with backlogs of work rising for the twenty-eighth month in a row[7] Input Costs and Pricing - Input cost inflation receded for both manufacturing and services, with the rate of increase below its long-run average[7] - Prices charged for goods and services rose at a lesser extent in April, but the inflation rate remained above the long-run average[7] Future Outlook - Business confidence improved, with the composite Future Output Index rising from March's four-month low, indicating expectations for further improvements in demand and productivity over the next 12 months[7]
Minutes of the Federal Open Market Committee
美联储FOMC· 2024-04-09 16:00
| --- | --- | |------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------| | | | | A joint meeting of the Federal Open Market Committee and the Board of Governors of the Federal Reserve System was held in the offices of the Board of Governors | Jose Acosta, Senior System Administrator II, Division of Inf ...
India Manufacturing PMI at 16-year high of 59.1 in March
S&P Global PMI· 2024-04-01 16:00
Group 1: Manufacturing Performance - India's Manufacturing PMI reached a 16-year high of 59.1 in March, up from 56.9 in February, indicating strong growth in the manufacturing sector[6] - The growth of new orders accelerated to the fastest rate in nearly three-and-a-half years, driven by robust domestic and export demand[6] - Manufacturing output increased for the thirty-third consecutive month, with the highest growth since October 2020[6] Group 2: Employment and Input Costs - Employment in the manufacturing sector returned to positive territory, marking the best job creation pace since September 2023[17] - Input cost inflation picked up in March, with companies reporting higher costs for materials such as cotton, iron, and steel[17] - Despite cost pressures, fewer than 5% of companies increased selling prices, leading to the weakest output charge inflation in over a year[17] Group 3: Inventory and Purchasing Trends - Input inventories saw the second-sharpest increase in the survey's history, reflecting companies' efforts to build stocks ahead of expected sales improvements[6] - Quantities of purchases rose at the quickest rate since mid-2023, among the strongest in nearly 13 years[6] - Capital goods showed the brightest area for both input buying and stockpiling, indicating a positive outlook for investment goods[6]
To Answer the Question of Why I Invest in China
Bridgewater· 2024-03-31 16:00
To Answer the Question of Why I Invest in China I invest in China because... ...I can't diversify as well as I'd like to without investing in China. For example, China and the US are the only dominant powers in the most important industries and how these two nations are with each other will shape the world. ...I have invested throughout many cycles in many countries and learned the adage "the time to buy is when there is blood in the streets." In other words, the time to buy is when everyone hates the marke ...
S&P Global Vietnam Manufacturing PMI Production dips for first time in three months
S&P Global· 2024-03-31 16:00
News Release Production dips for first time in three months Strongest optimism since September 2022 Embargoed until 0730 ICT (0030 UTC) 1 April 2024 Key findings Subdued demand leads to falls in output and new orders Source: S&P Global PMI. After recording marginal improvements in the opening two months of the year, business conditions in the Vietnamese manufacturing sector were broadly unchanged in March. Output and new orders both ticked lower, while a subdued demand environment led to a slower rise in in ...
tgeg-global-equity-pulse-0424-us
FRANKLIN TEMPLETON· 2024-03-31 16:00
In our view, prudent stock selection and portfolio positioning remain critical as investors navigate the push-and-pull effects of lower interest rates. Despite impending rate cuts, interest rates are unlikely to return to the near-zero level during the COVID-19 pandemic. As such, companies with weak balance sheets should not be expected to see improved financial health and sustained earnings growth just on rate cuts alone. Rate cuts may particularly drag on the profitability and shareholder return of the fi ...