M31 Capital’s Post

Good Evening. The market has been arguably sanguine since the October 7 attack by Hamas on Israel. The Organization of the Petroleum Exporting Countries (OPEC+) even extended supply cuts to keep oil prices relatively high. However, things took a sharp turn the weekend before last, when Iran directed hundreds of drones and missiles at Israel. Oil prices will continue to trade with a high geopolitical risk premium, especially when global demand remains resilient. However, we don't see oil prices spiralling out of control. The uncertain dynamics of the ongoing geopolitical situation and inflation supports our positive view on global energy majors, which can act as a portfolio hedge. The rise in geopolitical tensions and the uncertain outlook on energy prices further complicates the job of the Federal Reserve. There is more evidence that inflation in the U.S. is heating up again. Bond markets have dialled back the number of rate cuts expected for 2024 to just one and a half, compared to about six at the start of 2024. Against this backdrop, safe havens such as the U.S. dollar and gold are well bid – a reminder of the importance of diversification in portfolios. We discuss this, and more, in this week’s Markets in a Minute. In the video, Guy Foster, Chief Strategist, discusses economic factors that may have an adverse effect on U.S. equity markets. Plus, Janet Mui, Head of Market Analysis, reviews fresh economic data from China. #brewindolphin #supportingadvisers #marketcommentary

What to expect from the Fed this week? Our Asia ex-Japan CIO for Core Investment, Ecaterina Bigos, shared her views at Bloomberg China Show, with David Ingles and Ivonne Man. Watch interview here: https://bloom.bg/4eldznT 👉 We expect 25bps of cuts, with a dovish guidance. 50bps of cuts is not in the data and financial conditions have eased. 👉 Sentiment is expected to remain sensitive to downside surprises in growth. Carry assets act as a cushion against that risk. 👉 China policy must be more proactive, and innovative in balancing between investment and consumption, between manufacturing and services. Capital at Risk #Marketing Communication #AXAIM #AXAInvestmentManagers #Bloomberg Ecaterina Bigos Terence Lam Daniel Cao, CFA, CAIA Miu Shui Amy Lo Betsy Choi Janet Li Gloria Way Jenny Chan Nelly Poon Laetitia Ho

#HongKong and mainland #China stock markets are finally showing early signs of life as they gear up for the long game. The #US equities hit higher notes driven by solid 4Q23 corporate reporting season and supportive financial conditions. Not to be left behind, the #European #markets power on to hit record highs in March, despite having a far smaller exposure to the AI theme that has driven the US market. Get the latest market analysis from the US, Europe/the UK and HK/China markets in Equity Perspectives, our new bi-monthly report. http://bnpp.io/ZIlB50RjGP3 Chris Zee Godfrey Oyeniran Camilia Goh Darren Lee Jason Lim Nevis Lee

Today is the first day from “Summer Davos” in Dalian. I am sharing my live interview with CNBC’s Sam Vadas on China's evolving economic environment. Major Takeaways: 🔹Consistency in China's Global Dialogue: Premier Li Qiang reiterated his message seeking continued dialogue and cooperation with the international community. This consistent outreach is pivotal as China wants to be a cooperative partner in global economic and environmental efforts. In today’s increasingly polarized world, how do we keep collaborating? 🔹Technological Advancement and Economic Growth: The obvious lever is around technology and innovation as a key to stimulate demand. These new sectors are seen as crucial drivers for the next phase of economic growth in China. 🔹Investor Confidence and Market Dynamics: The landscape for foreign and domestic investors in China is undergoing recalibration. While some investors remain cautious and on the sidelines, others are increasingly committing to their investments. There will be increasing divergence among MNCs. 🔹The Green Economy and Sustainable Development: China is contributing to global climate goals through the development of green products and technologies. However, in the short term, there are economic pains faced by companies in the green sector as fierce competition and supply/demand imbalances will need to work themselves out. 🔹Consumer Behavior and Economic Potential: There is money in Chinese consumers’ pockets. With a staggering 56 trillion RMB in bank savings accumulated over the past three years, there's a massive potential for consumer spending if it gets unleashed. Watch the full interview: https://lnkd.in/gjreR9WK #WEF #AMNC24 #DAVOS

With the unprecedented uncertainties the global economy faces in 2024, China's financial sector stands at a critical point. At the 2024 China and Global Economic Forum, experts gathered to discuss the complex challenges, from stock market reforms to sustainable economic growth. As digital technology and AI create new opportunities, fostering transparency, rule of law, and trust within financial systems is essential for China to strengthen its role in the global economy and build towards a financial powerhouse by 2035. Full article: https://lnkd.in/eW-dv89f

Probably the biggest macro development of the year happened this week and for once the news did not come out of the US. Instead, China announced support for the property and (crucially for investors) equity markets. Our CIO Chris Brown summarises these changes and explains why, with Chinese investor positioning and valuations near all time lows, this looks like an opportunity. https://lnkd.in/emif9h3Y

Lighthouse Canton’s Weekly Report brings you to the heart of global financial market trends and developments. Explore the key developments this week: • When Two Worlds Collide - Bonds Price For Recession Equities Just Are Not Seeing • Credit Spreads Widen But Not Enough • Unwinding of JPY carry trade and US Treasuries • CEOs more cautious, but still see no recession • China – The biggest value trap of all • Yield Curve un-inversion • Concentration Will Quickly Become Problematic • Chapter 11 Filings Surge to Decade-High Levels • US Election Odds and the Bond Market • Is Soft Landing Possible and Probable? • China's Economy Slows Unexpectedly Explore these insights and more in our full report: https://lnkd.in/ds_nwGRn Shilpi Chowdhary, Prashant Tandon, Sumegh B., Audrey Tang, Sanket Sinha, Sunil Garg, Antoine Bracq, Dinesh Gogia, Charu Sheel Kunwar, Himangshu Baruah, Manas Chadha, Varun Kalsi, Charlene L., Harish Chowdhary, Atul Bhardwaj

Market participants are wondering what’s next for China’s markets and the U.S.-listed investment vehicles that focus on them. Morgan Stanley strategist Laura Wang on Tuesday revised price targets for the major Chinese stock market indexes, suggesting no room for further gains compared with current levels. “Despite the recent rejuvenated investor sentiment, we think the current market valuation level has already priced in a lot of expectation for reflationary measures and asset allocation and we do not expect much more rerating opportunity at [the] broad index level,” Wang told clients, referring to higher price-to-earnings valuations. “Today’s press conference at least in the near term reinforces such belief, in our view, and the stock market could see more divergence at individual stock level.” Merrill Lynch economist Helen Qiao called any expectation for big stimulus announcements “unwarranted,” given that the NDRC focuses more on implementation than creating strategy. What upset investors, according to Citigroup’s China chief economist Xiangrong Yu, was a lack of clarity on how the country would address its fiscal gap. “There was no discussion on budget revision, no mention of any ‘new’ trillion-yuan numbers, no real money guidance on consumption support,” Yu wrote to clients. “The equity market reactions clearly displayed investor disappointment.” Contact Us: bit.ly/AlgoTrader Website: alphabinwanicapital.com Free Algorithm Newsletter: bit.ly/AlgoNewsletter #Thematic #AI #MoneyMakesMoney #FutureProof

The recent selloff in global stock markets highlights the intricate interdependencies of our global financial system. This market volatility underscores the importance of vigilance and strategic planning for investors and policymakers alike. As key economies, like the United States and Japan, experience downturns, the ripple effects will significantly impact global economic stability, influencing everything from corporate investments to individual savings. Even the most niche industries will face problems were these situations to not improve. #Finance #StockMarket #EconomicTrends #GlobalEconomy #InvestmentStrategy #JapaneseEconomy #AmericanEconomy https://lnkd.in/g7v6PzSA

Understanding whether China’s economy can ever catch up with the US requires insight into the drivers of US outperformance. Our latest Spotlight project provides data-driven insight into arguably the most important issue for asset allocators in the coming years. Download this exclusive extract from our Spotlight client report now to learn what’s behind US outperformance. https://lnkd.in/e_eu7r_F #useconomy #uschinarelations #usoutperformance