In today’s briefing:
- Inflation Watch: Is the Inflation Momentum Back Before It Even Disappeared? 5 Pros and 5 Cons
- China’s Reopening: Nuanced Implications Domestically and for the Global Economy
- A Tale of Two Bubbles
- China: Bullish Global Catalyst?
Inflation Watch: Is the Inflation Momentum Back Before It Even Disappeared? 5 Pros and 5 Cons
- Some early indicators of inflation have started to show worrisome signals 6 months down the road
- Short-Term indicators continue to point to the downside for inflation
- Is the double-top inflation narrative warranted? Let’s have a look at pros and cons.
China’s Reopening: Nuanced Implications Domestically and for the Global Economy
- China’s government aims to reinvigorate economic growth in 2023 by selective assistance to sectors that have recently experienced regulatory headwinds, notably technology and real estate.
- Strategic geopolitical competition between Beijing and the West makes it difficult for technology to be a major source of growth from external demand sources.
- The reopening of China’s economy could stoke a new wave of commodity inflation that may have hawkish implications for monetary policy in developed markets.
A Tale of Two Bubbles
- It was the best of times. It was the worst of times. The S&P 500 remains in an uptrend, NASDAQ 100 violated an uptrend stretching back to the GFC.
- What’s the outlook for U.S. growth stocks? Have they bottomed?
- U.S. equities have been leading non-U.S. since the GFC, but much of the outperformance is attributable to the NASDAQ. Can U.S. equities continue to be global leaders?
China: Bullish Global Catalyst?
- Charts of the Euro STOXX 50, MSCI China, and S&P 500 (all in USD) tells a story of differing relative strength.
- Europe is still the global leader. U.S. equities are likely to be laggards for the remainder of this year.
- China and Asia are showing signs of a bullish turnaround and could be the catalyst for the next bull phase in equities.
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