China

China: A Deflating Dragon

Nov 11, 2024 3 min read paid

Over the past three years, most American economists believed that a recession would be necessary to bring inflation down to 2.0% in the US. While the US economy managed to avoid a downturn, those predictions may have been right. The recession, however, was in China as the huge negative wealth effect of falling property and stock prices caused Chinese consumers to retrench. China's government encouraged manufacturers to

Ed Yardeni
Eric Wallerstein

Geopolitical Hot Spots

Oct 15, 2024 3 min read paid

With the Fed in easing mode and US economic growth remaining resilient and even robust, we are still wondering what could possibly go wrong. We remain optimistic on the economic outlook and bullish on the outlook for stocks. We continue to monitor the geopolitical risks that might revive inflation and depress global growth. On Friday, JPMorgan Chase CEO Jamie Dimon said that these risks are "treacherous and getting worse.

Ed Yardeni
Eric Wallerstein

Larry & Ray’s Not-So Excellent Adventure in China is Over

Oct 8, 2024 3 min read paid

Both Blackrock's Larry Fink and Bridgewater's Ray Dalio have been notable and vocal China bulls for several years. It seems they've both joined our camp in recent days, issuing caution against investing in China as it supports Russia's war against Ukraine and becomes less favorable to capitalism. They should have placed their bets on stock markets in democracies such as the United

Ed Yardeni
Eric Wallerstein

Will China's Two Bazookas Shoot Silver Bullets?

Sep 30, 2024 2 min read paid

Over the past several days, China has unleashed several fiscal and monetary stimulus measures. China investor Jason Hu called these the "twin bazookas" policy of "[p]rint money and spend money." It's having an immediate effect, at least on stock prices. The Shanghai CSI 300 is up 27% since its low on September 17 (the day before the Fed's 50bps rate cut)

Ed Yardeni
Eric Wallerstein

Market Call: October Is Here. What Could Possibly Go Wrong?

Sep 29, 2024 3 min read paid

We asked the very same question at the start of September, and were hard pressed to come up with an answer. We concluded: "So perhaps, the path of least resistance will continue to drive stock prices higher. We are still expecting a yearend rally to 5800 on the S&P 500, but it could already be underway." The S&P 500 rose 1.6% during September

Ed Yardeni
Eric Wallerstein

Global Monetary Fire Hose To The Rescue!

Sep 24, 2024 3 min read paid

Chinese stocks rose 4.1% overnight thanks to the flurry of easing measures from its central bank (chart). The Peoples Bank of China lowered bank reserve requirements, cut interest rates, and will provide leverage to brokers to buy stocks. Propping up stocks with government funding sounds more like panic than proactivity to us. But the skinny of the matter is that the Fed's 50bps rate cut last week

Ed Yardeni
Eric Wallerstein

China Is The Source Of The Deflation Trade

Sep 10, 2024 2 min read paid

Forget about a recession in the US. Currently, it is China's recession/depression that is weighing on oil prices, global bond yields, and the dollar. Weak Chinese demand for oil caused OPEC today to trim the outlook for global oil demand, further depressing oil prices. Brent crude oil prices fell below $70 a barrel on Tuesday to their cheapest since December 2021 (chart). Declining oil prices dragged the

Ed Yardeni
Eric Wallerstein

Looking For Black Swans In September

Sep 3, 2024 3 min read paid

September has just started, and it is already living up to its reputation of being the toughest month of the year for stock prices which tumbled today during the first trading day of the month. So did commodity prices, led downward by oil and copper. The stock market selloff started when it opened and before August's weak M-PMI report was released at 10:00 a.m. EST, which

Ed Yardeni
Eric Wallerstein

Bonus Content: China In 10 Charts

Aug 29, 2024 2 min read

(1) Chinese consumers are depressed. (2) Home prices are falling in China. (3) Chinese stock prices are on downward trends led by real estate stocks. (4) China's real retail sales growth is weak and exceeds the growth of industrial production. (5) The growth rates of Chinese bank loans and M2 are falling rapidly. (6) Negative growth in M1 suggests that deflationary pressures on China's producer price

Ed Yardeni

China Dragon's Breath Is Less Fiery

Aug 14, 2024 2 min read

China's economy is faltering. July data suggest the government will have to provide more stimulus to meet its 5% economic growth target for the year. Most striking is the small but unusual decline in bank loans during the month (chart). It suggests a lack of confidence among businesses and consumers, potentially leading to reduced investment and spending. China's real retail sales rose just 2.2% y/

Ed Yardeni

Panda In A China Shop

Jul 15, 2024 3 min read paid

China just loaned two young pandas to the San Diego Z00. In the past, such Panda Diplomacy suggested that relations between the US and China might be improving. It's hard to come to that conclusion currently since both US presidential candidates seem to agree that the US needs to slap more tariffs on Chinese goods. China remains very dependent on exports to boost its economy, especially since the

Ed Yardeni
Eric Wallerstein

Recession With Chinese Characteristics

Jun 17, 2024 2 min read paid

China’s May economic indicators were broadly negative, as evidenced by the recent weakness in Chinese stock prices as well as the price of copper, which is very sensitive to economic developments in China (chart). The bursting of China's property bubble continues to weigh on the economy despite the government's lame measures to support property prices. Weak home sales and property investment data sent Chinese real

Ed Yardeni
Eric Wallerstein

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