Macro and Cross Asset Strategy

1. 2025 High Conviction Idea: The Case for a Rotation Out of India into Hong Kong – Part 1

By Rikki Malik

• Risk reward favours this shift in allocation between these markets.  
• Short to mid-term concerns on the Indian market warrant this strategic change
• Slowing revenue growth and less government spending leading to decelerating profits which is not yet reflected in market multiples

2. The Drill – The China Meltdown Is Ruining the Upbeat Trends in Manufacturing

By Andreas Steno, Steno Research

• Happy Tuesday, and welcome back to our weekly commodity editorial, where we keep you updated each and every week on what’s going on in the world of commodities, energy, and the like!
• It’s hard to talk about commodities without talking about China these days, as we have seen a complete reversal in the Chinese macro scene after we scouted last week for the best commodity plays should the Chinese stimulus come through.
• After all, they used the same wording as they did back in 2008, and it was wise of markets to “cry wolf,” as China would need to publish actual stimulus plans and their size before markets chased the story.

3. A Hindenburg Omen in an Oversold Market

By Cam Hui, Pennock Idea Hub

• What happens when an ominously sounding Hindenburg Omen occurs when the market is oversold? The notoriously unreliable Omen is said to have called “ten of the last three market corrections”.
• The market’s reaction to the FOMC decision added to the risk-off market tone. The Fed marked down the number of 2025 quarter-point rate cuts from four to two.
• Four of the five components of our Bottom Spotting Model have flashed buy signals. Two or more simultaneous buy signals have been good long entry points for traders.

4. Steno Signals #176 – Will 2025 be 2007 or 2021 all over again?

By Andreas Steno, Steno Research

• Welcome to my weekly editorial, where I assess the big-picture macro landscape, explore potential risks, and identify the next narrative for traders.
• Last week, I kept getting pings, rings, and dings from traders eager to discuss whether inflation is poised to make a comeback following the fourth consecutive hot inflation report in the U.S. Admittedly, we’re trending around 3.5% inflation on an annualized basis, which doesn’t look great amidst a cutting cycle.
• Consequently, the market has started repricing the inflation outlook, with the near-term (2-year) outlook once again outpacing the 10-year inflation outlook in inflation swaps.

5. Positioning Watch – Everything you need to know about Fixed Income positioning before we enter 2025

By Andreas Steno, Steno Research

• Hello everyone, and welcome back to our weekly positioning update – this week with a strong focus on the moves we are seeing in Fixed Income and forward-pricing at the moment and the subsequent positioning as we head into 2025.
• Markets continue to lean bearish on the Eurozone while upbeat on the US in equity terms, and likely for good reasons as macro data hasn’t given any good arguments as to why one should be upbeat on the Eurozone, and the signs we are getting on European growth in our nowcasts have yet to show up in actual releases – for now, it’s mainly the less China sensitive countries like Spain, Portugal and Greece that are performing macro-wise while Germany, France and Italy suffer.
• GDP growth is surprisingly strong in the first 3 whilst very weak in the latter 3, and given the latter’s weighting in European equity indices, it makes sense why we are seeing hedge funds being long consumer staples, health care and other defensives while scaling down bets on cyclical equities.

6. Walker’s Weekly: Dr. Jim’s Summary of Key Global Macro Developments – 20 Dec 2024

By Dr. Jim Walker, Aletheia Capital

• US and China treasury yields highlight inflation control challenges, with the Fed’s rate cut fueling market uncertainty.
• Asia’s mixed monetary decisions saw Japan hold rates, while the Philippines’ cuts worsened currency pressures.
• China’s retail sales remain resilient despite lower growth expectations, contrasting with declining real sales in the US.

7. Speadbites: Food for Credit Market Thought as We Head Into the Holidays

By At Any Rate, At Any Rate

• Global credit ecosystem remains stable, similar to 2024 outlook
• Tight spreads and low all-in yields support demand in credit markets
• Concerns about non-cash accrual companies in private credit portfolios and potential impact on risk distribution from public to private markets, but overall sentiment remains positive for credit markets.

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

8. T.R.U.M.P | Dec 19, 2024

By Mark Tinker, Market Thinker

• According to Webster the word of the year is Polarization.
• Oxford have Brain Rot and Cambridge have Manifest. Collins have Brat, which was apparently ‘made famous by a Chari XCX album’ (me neither).
• Personally, just as Cozzy Livs (cost of living) was my favourite in 2023, this year really deserves to be ‘Word Salad’, although without Kamala it is unlikely to reappear anywhere near as much.

9. Thailand: Policy Rate Held At 2.25% (Consensus 2.25%) in Dec-24

By Heteronomics AI, Heteronomics

• The Bank of Thailand unanimously maintained the policy rate at 2.25%, aligning with consensus expectations, citing alignment with economic potential and inflation within target expectations.
• Economic growth projections for 2024–2025 remain steady, but uneven sectoral recovery, particularly in manufacturing and SMEs, presents ongoing risks to sustainable recovery.
• Global economic uncertainties, credit growth trends, and the efficacy of government debt-relief programmes in supporting domestic demand and financial stability will influence future policy decisions.

10. Monday Macro: Bumper Crystal Ball Time, Plus the US Equity Bulls Are Still Rampaging

By Adventurous Investor, The Adventurous Investor

• Over the last week, the FTSE ALL World equities index stalled slightly, losing 0.8% in value, with the FTSE ALL Share index losing a tad more, down a smidgeon under 1%.
• Tech stocks again outperformed, sending the Nasdaq 1.5% higher and taking the index to over 20,000 for the first time ever.
• The S&P 500 edged 0.5% lower, and the Russell 2000 ended the week 2% down. The Magnificent 7 hit new highs as the market-broadening trend evaporated.

1. South Korean Parliament Lifts Martial Law Declared by the President Yoon

By Douglas Kim, Douglas Research Advisory

• Late Tuesday on 3 December, South Korean President Yoon Suk-Yeol declared a martial law. Several hours afterwards, the South Korean Parliament voted to lift President Yoon’s martial law order.
• By drawing so much attention to the “dangers of the communist party from within Korea and outside,” President Yoon is trying to align himself closer to President Trump. 
• In the near term, the impact on the Korean stock market of the declaration and lifting of martial law is likely to be negative.

2. Potential Impeachment of President Yoon Suk-Yeol and Impact on the Korean Financial Markets

By Douglas Kim, Douglas Research Advisory

• In this insight, we discuss the potential impeachment of the South Korean President Yoon Suk-Yeol and the implications on the Korean financial markets.
• We would put a 50-60% probability that there is more than 200 votes to impeach the South Korean President Yoon Suk-Yeol right now by the members of the Parliament.
• We would attach about 30-40% probability that at least six justices of the Constitutional Court vote in favor of impeaching President Yoon. 

3. The Week Ahead – Give Thanks For

By Nomura – The Week Ahead, Nomura – The Week Ahead

• Trump announced potential tariff policies on social media targeting Canada and Mexico, leading to a weakening in both currencies.
• Trump appointed key members to his economic team, setting the tone for his administration’s policies.
• Markets are anticipating the Fed meeting in December, with expectations of a dovish hold and strong labor market reports.

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

4. Positioning Watch – Markets have NOT been Ready for Growth to Weaken in the US

By Andreas Steno, Steno Research

• Happy Thursday, and welcome to our weekly positioning watch, brought to you just before the crucial NFP report tomorrow.
• From what we see across markets, it looks like participants are starting to take risk off the table in equity space ahead of the report.
• Markets have struggled this week to settle on a clear narrative for USD assets, especially USD rates.

5. Europe Flash Watch – The German 2025 bazooka!

By Andreas Steno, Steno Research

• In Germany, “debt hawks” are slowly but surely waking up to the reality of their manufacturing industry being brought to its knees.
• In Angela Merkel’s recent book, she pleads for a softer stance on the debt brake, and the political landscape in Germany seems to be softening on the “Schwarze Null” in general, with also the Buba member Nagel now advocating for a softer stance.
• The future government would need a two-thirds majority in the Bundestag and Bundesrat to change the debt brake.

6. What Is the Real Purpose of President Yoon’s Martial Law – To Reveal Election Fraud?

By Douglas Kim, Douglas Research Advisory

• One of the most important questions about the martial law three days ago is why did President Yoon send special forces (297) to the National Election Commission?
• President Yoon may have ordered troops to be deployed to the NEC to get to the bottom of the election fraud since all the important election servers are stored there.
• It is EXTREMELY DIFFICULT to prove an election fraud. Even if President Yoon declares a war on election frauds, he must have extraordinary pieces of data to back this up.

7. Steno Signals #128- I thought Trump and tariffs were supposed to lead to a bond riot?

By Andreas Steno, Steno Research

• Happy Sunday, friends, and welcome to my straight-to-the-point editorial on everything macro!Just as everyone had concluded that Trump and his (alleged) trade wars would be bond-unfriendly, the bond market has started performing much better—exactly as we suggested would happen following the election results.
• The first major difference compared to 2016, when bonds rioted after Trump’s victory, is that Trump was the clear base case this time around.
• The second major difference is that Trump’s policy mix is not inflationary this time—in fact, it’s quite the opposite.

8. The Week at a Glance: Manufacturing Rebound, Fed Liquidity Signals & Oil’s Fragile Balance

By Andreas Steno, Steno Research

• Happy Monday!Each week, we collect the most important events in the week ahead and provide you with our direction going into them.
• Enjoy!Monday – ISM ManufacturingThe ISM Manufacturing data is due this afternoon, with consensus expecting a rebound from last month’s report, forecasting a figure of 47.6. After reviewing our model library, we see substantial risk/reward in betting on an upward surprise in manufacturing data.
• For instance, our regional PMI model—which uses regional manufacturing prints as inputs—indicates a material increase in the manufacturing PMI today.

9. Geopolitical Flash Update – Bye Bye Barnier

By Anne Sandager, Steno Research

• France sovereign debt reached a record €3.228 trillion, amounting to 112% of GDP in June, well above the 60% cap set by EU regulations.
• France growing debt have slowly been chipping away at investors’ confidence in French bonds.
• After Macron called a snap election in June resulting in a hung parliament, risk premiums on French 10-year bonds have shot up.

10. Here is What We Told Hedge Funds This Week—and How We’re Trading It!

By Andreas Steno, Steno Research

• Happy Friday! Every week, we dive deep into macro trends, analyze asset movements, and uncover the best value plays in the world of macro.
• These insights are shared with hedge funds and institutional clients, and each Friday, we’re bringing them directly to you.
• While the macro landscape can be complex, we believe it doesn’t have to be intimidating.

1. Here’s What We Told Hedge Funds This Week – and How We’re Trading It!

By Andreas Steno, Steno Research

• Happy Friday! Every week, we dive deep into macro trends, analyze asset movements, and uncover the best value plays in the world of macro.
• These insights are shared with hedge funds and institutional clients, and today, we’re bringing them directly to you.
• While the macro landscape can be complex, we believe it doesn’t have to be intimidating.

2. Flash Liquidity Update: A USD liquidity PUT is now in place

By Andreas Steno, Steno Research

• We just received the meeting minutes from the November FOMC meeting, which include two important takeaways on liquidity—both of which are positive.
• We have been highlighting for some time that markets are trading close to pain thresholds in USD liquidity (and below them in EUR liquidity).
• The Fed is now acknowledging the need for a “put” on liquidity levels.

3. The Next Four Years…

By Thomas Lam

• The Republican sweep, both in Congress and the White House, seems to have sparked a risk-on attitude across financial markets of late
• But Republican presidencies have coincided more regularly with periods of post-war economic downturns
• And the disparate US equity market performance enveloping presidential cycles is a nagging puzzle   

4. EM Fixed Income: Emerging Markets Outlook & Strategy for 2025

By At Any Rate, At Any Rate

• US election outcome and policy proposals causing challenges for emerging markets in 2025
• Expectations for US exceptionalism and potential insularity affecting global trade and growth
• Potential impacts on inflation, monetary policy, fiscal dynamics, and investment environment for EM fixed income in 2025, with short-term opportunities amidst uncertainties.

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

5. Asian Equities: Be Selective – Focus on The “ROE Winners”

By Manishi Raychaudhuri, Emmer Capital Partners Limited

• Asia is cheap relative to the US – trading at less than 40% of US’s P/BV – but that’s because Asia’s ROE has consistently declined relative to US’s.
• Over the next couple of years Asian ROEs are forecast to revive relative to the US’s but all Asian markets are not forecast to participate in this recovery.
• The “ROE Winners” (rising forecast ROEs) are Korea, Taiwan, India, Malaysia. Indonesia to stay flat but solidly higher than Asian average. We are skeptical of HK/China and Thailand’s ROE recovery.

6. Japan Funds:  Extreme Stocks

By Steven Holden, Copley Fund Research

• We screen for Japanese companies at the extreme ends of their positioning or momentum ranges among active Japan equity funds.
• Low Positioning coupled with Negative Momentum: Nissan Motor Corp and Misumi Group
• High Positioning coupled with High Momentum: ASICS Corp and Kyushu Railway

7. CHINA TARIFFS: Fact and Fiction

By David Mudd

• The US has ramped up its tariff threats months before Trump even takes office.  The newly appointed trade representative is a China hawk with some questionable policies ideas.
• China has reduced its dependency on US exports by half over the last several years and is better prepared to handle trade negotiations.
• Although previous trade negotiations during Trump’s first term lasted more than a year, most of the tariffs were never imposed. 

8. Steno Signals #127 – We need a bit of bad news for liquidity to improve

By Andreas Steno, Steno Research

• Hope you had a great weekend! Here’s this week’s sneak peek into my thoughts on liquidity trends and how they influence my approach to risk-taking.
• Watching the alt-season unfold from an incredibly wet and windy Copenhagen this weekend has been quite bizarre.
• The weather outside certainly doesn’t bring out my animal spirits, but there’s a certain smell of 2021 in the air in financial markets—especially if central banks decide to print more into this scenario.

9. Positioning Watch – The US Exceptionalism Story Is Back in Play!

By Andreas Steno, Steno Research

• Main point: The current positioning picture is becoming increasingly uniform across asset classes: higher US growth, higher USD rates versus EUR/GBP rates, higher USD vs. peers, and higher US equity returns compared to Europe/Asia.
• The risk/reward of taking the opposite bet is starting to look appetizing.

• We have been looking at the explosive increase in US equity positioning for a while, as multiple indicators show that equities are reaching stretched points positioning-wise — CFTC positioning among asset managers skyrocketing, our own data showing increased positioning in US vs. the rest of the world, and surveys starting to indicate that everyone is expecting equities to crawl higher.

10. Deciphering Trumponomics 2.0

By Cam Hui, Pennock Idea Hub

• Looking to 2025, market returns are likely to be more uncertain than in the past. The degree of dispersion in the range of forecasts is wider than usual.
• There will be winners and losers. Deregulation should benefit the energy, AI-related technology, and financials. 
• Losers include bonds, and construction stocks because of their sensitivity to both rising rates and heightened labour costs from deportation.

1. 2025 High Conviction Idea: Gold

By Cam Hui, Pennock Idea Hub

• Gold prices have staged multi-year breakouts in multiple currencies, indicating a long-term bullish outlook.
• In addition, gold is on the verge of staging relative breakouts against global equity markets that point to multi-year outperformance ahead.
• The U.S. macro outlook calls for a re-acceleration of inflation, which is also positive for gold.

2. Trump Watch: Possible U-Turn on Tariffs?

By Andreas Steno, Steno Research

• Our Geopolitical team is wrapping up an analysis on the escalating Ukraine-Russia conflict.
• In the meantime, here’s a piece we believe markets might not yet be fully tuned into:With Donald Trump and Elon Musk seemingly forming a close alliance, their influence on trade and economic policies has become a hot topic.
• Notably, Vivek Ramaswamy and Musk have thrown their support behind Javier Milei’s economic strategy in Argentina, which includes radical measures such as aggressive spending cuts and a commitment to reducing trade barriers.

3. EM as an Asset Class 2024

By At Any Rate, At Any Rate

• EM sovereign debt has seen significant changes since the pandemic, but no wave of defaults has occurred
• China’s debt numbers are higher than Europe’s for the first time, impacting the global market
• Sovereign debt restructuring remains a complex and idiosyncratic process, with challenges ahead for debt dynamics and growth in the EM market

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

4. The Week at a Glance – The largest company about to report – fuel for the Nasdaq bet?

By Andreas Steno, Steno Research

• Happy Monday! Welcome to our “Week at a Glance” series, where we highlight the key events and trends to watch for the week ahead.
• Monday:BOJ Ueda – Volatility IgnitedBank of Japan Governor Ueda’s remarks today set the stage for rising yen volatility, as he dodged giving markets a decisive signal on December’s rate hike prospects.
• With Ueda emphasizing data-dependency and the challenge of gauging the weak yen’s impact, traders are left grappling with a coin toss for December – keeping uncertainty alive.

5. Overseas Equity ETFs Surpass Domestic Equity ETFs For the First Time in 17 Years

By Douglas Kim, Douglas Research Advisory

• One of the biggest trends impacting the fund flow in Korea this year has been the huge capital inflow into overseas equity ETFs. 
• The net asset value of the listed ETFs in Korea investing in overseas stocks surpassed the ETFs investing in domestic stocks for the first time in 17 years.
• The ETFs that invest in overseas stocks were 35.8 trillion won on 12 November 2024, up 111% from 12 January 2024.

6. Steno Signals #126 – Where did all the liquidity go?

By Andreas Steno, Steno Research

• Happy Sunday, everyone! If you can’t show it in a meme, then it’s not true.
• That’s my modus operandi in the research business, and I stumbled upon this tremendous meme of the business cycle and how JPoww and his ilk respond to it.
• This has been the Fed’s operating model for a while: exaggerating the business cycle in both directions.

7. US Politics: “Liquid Gold”

By Alastair Newton, Heteronomics

• Donald Trump is committed to reducing energy prices by 50% within a year.
• However, uncontrollable factors may hinder this goal.
• As such, he may only achieve a modest success, if any.

8. Macro Regime Watch: An In-Depth Look at Regime Trends Across Major Markets

By Andreas Steno, Steno Research

• Welcome back to Macro Regime Watch, where we dive into our nowcasting models to analyze Growth, Inflation, and Liquidity trends.
• Over recent months, we’ve dedicated substantial time to upgrading our models and refining the data we use.
• But the core question remains: how do we interpret the complexities of the macro environment, and how can these insights inform financial market strategies?

9. Major M&A Rule Changes Approved by the Korean Government

By Douglas Kim, Douglas Research Advisory

• On 19 November, the Financial Services Commission (FSC) announced major rule changes on corporate mergers and acquisitions have been approved by the Korean government.
• Revised rules have three specific goals: Improve rules on calculating and determining merger prices when M&As take place between nonaffiliated business entities, strengthen disclosure duties, and improve external evaluation system.
• If the Korean government is really serious about making positive rule changes, they need to apply these new laws not just for NON-AFFILIATED companies but more importantly for AFFIILATED companies.

10. Portfolio Watch: Stay Composed—The Trump Trade Is Still ON

By Andreas Steno, Steno Research

• Happy Friday and welcome to our weekly Portfolio Watch.
• Many have been puzzled by the weakness in US markets towards the end of the week, with explanations largely pointing to an exhaustion of the Trump trade.
• This trade had been roaring across USD, USD bond yields, USD equities, and Crypto.

1. Steno Signals #125: EUR Liquidity Overtakes USD Liquidity – A Historic Shift

By Andreas Steno, Steno Research

• Happy Sunday from Copenhagen.
• Bear with me this week through this long read as we approach an extremely interesting crossroads in sovereign bond markets, impacted by very tight liquidity.
• This story has been somewhat masked by policy events in the US and Germany, but it may nonetheless be the most important narrative for Q4, which is why you need to pay attention to it.

2. New Tariffs and China: THE BARK IS WORSE THAN THE BITE

By David Mudd

• Trump’s approach to China will be more transactional based on trade and technology.
• China’s dependence on the US for its exports has declined over the last 6 years.  ASEAN and other emerging markets are the engines for China’s export growth.
• The average tariff on China’s exports to the US will increase from its current level of 20% but may be tempered by a reciprocal import agreement with the US.

3. Flash Macro Watch: The Fed has abandoned its 2% target

By Andreas Steno, Steno Research

• Following another reasonably hot U.S. CPI report yesterday, it’s time to dust off the old sell-side charlatan chart comparing today’s inflation to the 1970s.
• Honestly, I find this comparison absurd in many ways, as the drivers of inflation are different now.
• Still, there is an interesting resemblance, which got me thinking…Inflation in the U.S. is trending around 3-3.5%, and the Fed has made no progress over the past 3-4 months toward the 2% target.

4. US Politics: Promises, Promises

By Alastair Newton, Heteronomics

• Donald Trump has consistently advocated for the use of tariffs to address what he perceives as ‘unfair’ trade practices causing US trade deficits.
• His stance, whether used as a bargaining chip or not, is based on a Hobbesian view.
• This viewpoint poses a significant threat to the global economy.

5. Second Trump Presidency: Growth Focus Will Support Equities, but Challenge the Fed

By Said Desaque, DeSaque Macro Research

• The decisive outcome of the US presidential election has significantly reduced the uncertainty facing financial markets due to their familiarity with President-elect Trump’s policies during his first term.
• President-Elect Trump has a complex past relationship with the Fed. There are fears that pressure will be exerted on the Fed to boost growth at the cost of higher inflation.
• US fiscal policy conduct will be closely monitored by the Treasury market which is discounting fewer policy rate reductions by the Fed in 2025. Fed policy conduct will remain data-dependent.

6. How to Trade the Trump Euphoria Rally

By Cam Hui, Pennock Idea Hub

• We expect the stock market to rally into January, driven by corporate tax cut expectations, FOMO performance chasing and buybacks as the post-earnings season window re-opens.
• Expect stock prices to consolidate or pull back just before Inauguration Day.
• That’s when many of the unknowns of the Trump Administration’s initiatives will be better defined.

7. The Drill: A Look at Trump’s Policy and Their Impacts

By Ulrik Simmelholt, Steno Research

• Before we get to Trump, we need to quickly discuss OPEC and their recent cut in demand forecasts.
• This reduction hints at an unwillingness to increase production in the near future.
• Saudi Arabia is key here, as it holds the largest excess capacity, and a production hike from them could swing the market and send prices below $50 USD in the blink of an eye.

8. Asia Geopolitics: Dealing with a More Trumpian World

By Manu Bhaskaran, Centennial Asia Advisors

• Asia Pacific economies benefit from a global order which preserves their sovereignty and allows them to prosper.  Trump’s return puts some of these benefits at risk. 
• Washington under Trump will continue to pursue its rivalry with Beijing, but Trump’s responses to crises in Ukraine and the Middle East could leave instability in its wake.  =
• Washington’s allies in Asia will start “Trump-proofing” their defence strategies.  Countries will hedge between the US and China while ramping up military spending.  

9. Steno Signals #126: Disentangling the ECB Schnabel Speech – How Will QT Develop from Here?

By Andreas Steno, Steno Research

• We’re at a critical juncture in sovereign bond markets, with liquidity running razor-thin and the game changing fast.
• German Bunds, traditionally rock-solid, are now trading through swaps and nearing zero on cross-currency swaps (ESTRON/SOFR) – a first in modern market history.
• The takeaway? Major central banks, especially the ECB, are pressing too hard on QT, and the markets are about to hit back hard if they don’t ease up soon.

10. Overview #12 – Not Another Trump Trade!Time to Fade?

By Rikki Malik

• A review of recent events/data impacting our investment themes or outlook
• In the markets we follow, China, Gold and the JPY most impacted
• Which ones should we fade and where has the trend changed?

1. OVER THE HORIZON: Thematic Review Year-To-Date

By David Mudd

• Our most prominent theme this year has been to BUY HK/China markets.  We are still very bullish on these SECULAR BULL markets.
• We have been Bullish on gold and discussed the asymmetry of its price movements given the global tightening starting in 2021/22.  Gold will continues to benefit from negative real rates.
• We have been Bearish on Japan since publishing Technically Speaking: Japan Meets Resistance and Hong Kong Finally Breaks Downtrend on April 2nd.  Japan’s market is facing significant headwinds going forward.

2. Technically Speaking, Breakouts and Breakdowns: HONG KONG (OCTOBER 14)

By David Mudd

• Hong Kong Dollar continues to trade at the strong end of its band  resulting in upward pressure on HIBOR in turn causing a further unwind of the HKD carry trade.
• HSI shows the strongest market breadth in 15 years as nearly all members trade above 200 DMA.
• Xtep International (1368 HK) , Xiaomi Corp (1810 HK) and China Education Group (839 HK) all had breakouts to form uptrends.  All are part of the consumption sector in China

3. GEM Funds Underperform in Q3.

By Steven Holden, Copley Fund Research

• Active EM Funds delivered an average return of +6.85% in Q3, underperforming the iShares MSCI Emerging Markets ETF by 0.83%, with 38.8% of funds beating the index.
• Morgan Stanley Developing Opportunity and Aikya Emerging Markets topped the performance charts for the quarter.
• Underweights in Alibaba Group Holding and Meituan, and overweights in SK Hynix and cash holdings hurt performance.

4. HK/China: DOOM AND GLOOM? DON’T GET FOOLED AGAIN

By David Mudd

• As HK/China markets complete their retracements after the best rally in more than a decade, the exaggerated pessimism from the media and analysts returns.
• The government continues to roll out measures to relieve the pressure on the property market in what is a multi-year process with no quick fix.
• Even after a historic rally, the HSI still trades at a significant valuation discount which will narrow in the coming months.

5. China Watch: Time to play briefing bingo again..

By Andreas Steno, Steno Research

• Welcome to our China Watch series, where we look at the Chinese case through the lens of Western investors.
• Tomorrow, we will have another briefing aimed at boosting the property market, which is one of those tricky conundrums to deal with.
• Housing starts have already dropped back 20 years, and the value of unsold homes and projects is sky-high.

6. Steno Signals #121: Whatever It Takes—In the US, but NOT in China

By Andreas Steno, Steno Research

• Happy Sunday from Copenhagen!I spent most of Saturday morning discussing the fiscal briefing with clients.
• Even though I’m admittedly not as actively involved in business with China as I was a few years ago, I still feel relatively comfortable assessing the ramifications of the briefing.
• It was exactly what I feared: a big nothing burger.

7. Portfolio Watch: China needs to deliver, or it could end in tears

By Andreas Steno, Steno Research

• The fiscal briefing in China tomorrow will be crucial, as inflows into the country have significantly diminished in recent days.
• This highlights the need for a constant stream of positive news to sustain the rally.
• Given the expectations building around the message from Chinese authorities, we don’t have high hopes that they will exceed market consensus.

8. The Week at a Glance: No Bazooka from China (Yet) – Over to You, ECB

By Andreas Steno, Steno Research

• The recent Chinese fiscal briefing was underwhelming, as expected.
• China continues to focus on supply-side measures, which remain ineffective in addressing the pressing need for increased demand.
• Instead of stimulating consumption across the economy, China is attempting to incentivize asset demand and reshuffle credit profiles—approaches unlikely to produce meaningful results.

9. Comparison Between China and Japan Debts

By Alex Ng, Fortress Hill Advisors

• China housing crisis will likely mean that household debt/GDP flat lines in the coming years like Japan after 1990 and be a headwind for consumption.
• Meanwhile, the downturn in residential construction is already greater than that experienced by Japan after 1990 and in itself will be remain a structural headwind for China GDP.
• Though China corporate debt/GDP ratio is higher than Japan in 1990, China LGFV debt is 50% of GDP and will be swapped for local and central government debt.

10. CrossASEAN Ground Zero  – Bukalapak, Astra International, OhHaju, and Sea Ltd

By Angus Mackintosh, CrossASEAN Research

• This week we look at Bukalapak, as Emtek increases its direct stake, Astra‘s latest healthcare push into cardiology, and Ohhaju (OKJ TB), Thailand’s latest organic food IPO. 
• We also look at Sea Ltd (SE US)‘s latest move to apply for a digital banking licence in Thailand, which will help to further increase the platform’s regional footprint.   
• CrossASEAN Ground Zero is a thematic weekly product that focuses on key Southeast Asian themes and technology trends with a core focus on Indonesia.