In today’s briefing:
- ‘The End of China’ Narrative Is Completely Wrong: Think Liquidity, Think Cycle
- CX Daily: Four Things to Know About Tightened U.S. Rules Over Chip Exports to China
- The Weekly Market Monitor – Where’s the Plunge Protection Team?
- UK Small/Midcap Fund Positioning Update
‘The End of China’ Narrative Is Completely Wrong: Think Liquidity, Think Cycle
- The popular ‘End of China’ narrative is wide-of-the mark. China has suffered a self-induced (Western-style) demand slowdown to protect the Yuan
- 2023 seems to have brought in a new policy regime that emphasizes domestic GDP growth over a rigid exchange rate
- Watching liquidity is crucial. Latest evidence shows the People’s Bank injecting substantial funds back into domestic money market. Expect a coming cyclical pick-up
CX Daily: Four Things to Know About Tightened U.S. Rules Over Chip Exports to China
- Chips /: Four things to know about tightened U.S. rules over chip exports to China
- Belt and Road Initiative /: Putin says Arctic shipping route could be navigable year-round by 2024
- Default /: Distressed Country Garden logs first bond default
The Weekly Market Monitor – Where’s the Plunge Protection Team?
- Geopolitical risks are building, not only because of the developments in the Middle East. Semiconductor companies, including ASML and NVIDIA, got a clear warning this week that their growth ambitions in China are at risk.
- Chinese property developers show ‘Crypto-like’ declines, and downside risks for Commodities appear.
- Bond yields keep pushing higher, but our fair value estimate for the 10-year US Treasury yield points to a peak.
UK Small/Midcap Fund Positioning Update
- UK Industrials maintain top Sector weight. Real Estate and Consumer Discretionary underweights fund Technology overweight.
- Investment Managers Industry group hits record exposure. REITs largely unloved by UK Small/Midcap funds.
- Future plc remains the most widely held company. XPS Pensions and Foresight Group Holdings are the top overweights. B&M, Weir Group and Rightmove lead the underweights.
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