The Chinese Keep Firing Stimulus Bazookas
Over the last week, the Chinese Government has started to fire its stimulus bazookas.
Today's installment ...
SCMP: Shanghai, other top tier-1 cities ease ownership curbs in boost for China’s housing market
Results in ...
*CHINA PROPERTY STOCKS GAUGE JUMPS 11% AFTER EASING MEASURES
And causing ....
*CHINA'S CSI 300 UP 22% FROM SEPT. LOW, HEADED FOR BULL MARKET
(biggest such rally since 2008)
The Chinese finally stimulating domestic demand gives hope that they will start to consume more.
This idea is significantly contributing to this unfolding rally in industrial metals.
Example
*IRON ORE SURGES ALMOST 8% AS CHINESE CITIES EASE HOME CURBS
Why should we care?
If the Chinese keep firing these stimulus bazookas, the commodity rally should broaden to energy.?The Chinese consume more energy than the U.S. or the EU.
If so, consider this chart.
Just two weeks ago, BofA released its Sept Global Fund Managers Survey. It covered 206 managers with $593 billion in assets.
As this graphic shows, they gave up on China and sold out of it, turning very bearish.
Now, Chinese stocks are 22% in less than ten trading days.
50 years of high level experience with major FI’s, eg: Citibank and Chase, as an MD in derivatives, interest rate and FX risk management, fixed income management and prop trading. Also, served on the Board of Bank OZK
1 个月Great charts. Interesting to see the CCP try to stimulate their way out of the slow economy and weak real estate market. Look for higher inflation as a result. The oil price vs 10 yr UST yield chart strongly suggests that the likelihood of lower oil prices resulting from a large increase in supply from the Saudi’s should drive the 10 year yield down another leg which should aid the beleaguered housing market. If this scenario occurs, then the Fed will feel even more comfortable reducing the Fed Funds rate through year end. Lower oil prices and lower interest rates should help the economic data to improve and provide fundamental support for higher stock prices.
Managing Director, Z-Ben Advisors
1 个月Not exactly James Bianco It's been all monetary, for the most part, with the Ministry of Finance conspicuously out of the public conversation. Ran through the key issue this morning on CNBC if you're interested. https://youtu.be/r8FhbO9FG50?si=FIVTM3YqCZ3B2DUV
Pleasantly (Early) Retired - No Crypto nor NFTs Please
1 个月No subtlety there. Deapite the self hatred of losing face, Xi is clearly in desperation mode and his dependents should take heed = Putin, Jong Un, Ayatollah Sayyid Ali Khamenei, Assad … fill in the blank