In this briefing:
- Are US Stocks A Buy Yet?
- Taiwan: Manufacturing Still Rules the Roost
- Reforms/US-Canada-China/ Economic Gloom/Bike Crash/Stocks
1. Are US Stocks A Buy Yet?
- 5%-like rallies on Wall Street are signs of a bear market not a bull market
- Bull markets require strong liquidity and low risk appetite, neither yet apply
- Risk appetite readings at minus 12.6 are still above the minus 40 criterion for an upturn
- Recent large fall in risk appetite consistent with upcoming economic recession
2. Taiwan: Manufacturing Still Rules the Roost
“No longer is Taiwan the isolated, renegade province. Increasingly it is an integrated part of the Greater China economy.”
–Asianomics Report, No. 5/2013, Taiwan: Paradox Island, 11 June 2013
Famous last words. Five years ago all the talk was of the Economics Co-operation Framework Agreement (ECFA) between Taiwan and Mainland China brokered by the then Kuomintang Government led by President Ma Ying-jeou and the Xi Jinping Administration. The main focus at that time was on the services sector deal which would allow Taiwanese banks, insurance companies and other service industries greater access to a market that the manufacturing sector had penetrated years before.
There was opposition on the island to the opening (there would have been opposition even if it hadn’t been China) but the whole deal went into abeyance as soon as Tsai Ing-wen, then the leader of the pro-independence Democratic Progressive Party (DPP), won the presidency in 2016 (Tsai resigned as party leader after the DPP’s defeat in this November’s local elections). Today, Taiwan is in the deep freeze as regards China relations and feeling increasingly bullied and bribed by the Mainland (see Taiwan Politics: Bullied and Bribed by the Mainland). The country, as ever, is reliant on the global trade cycle although, truth be told, that is a millstone of its own making. There are great companies listed on the Taiwan Stock Exchange and investors should be heavily positioned in them but, increasingly, they have nothing to do with what is going on in Taiwan itself. That looks unlikely to change in the near future.
3. Reforms/US-Canada-China/ Economic Gloom/Bike Crash/Stocks
China News That Matters
- No one dictates to China but me
- US targets Chinese hackers as rift widens
- Weak data raise pressure for stimulus
- After high-speed climb, bike-share giant collapses
- A brighter new year for China’s stock market?
In my weekly digest China News That Matters, I will give you selected summaries, sourced from a variety of local Chinese-language and international news outlets, and highlight why I think the news is significant. These posts are meant to neither be bullish nor bearish, but help you separate the signal from the noise.
