In PL October 2022, we looked at emerging markets, especially China where stock markets have been particularly battered. Chinese stocks fell further in a panicky selloff, and then bounced dramatically as comments arose that Covid-related lockdowns would be eased. Personally, I think that Covid (or whatever other excuse for social-credit control) will probably be around for longer than expected in China, and that there will be no “return to normalcy” for China for some time. It has been a great trade, but for a longer-term timeframe, I am not chasing this higher.
Still, it’s worth keeping an eye on for a retracement.
The Chinese economy does not look like it has been doing well, despite rosy official statistics.
Some people think the Chinese economy is only about half the size the government claims.
So far, the US economy has not done particularly badly. 3Q earnings were a little flattish, but nothing disastrous as gigantic profit margins continued, for now.
I think we will have a “hard landing” (at a minimum) in 2023, which would mean a decline in Operating Earnings by 25%+, and GAAP earnings by a lot more than that. I’m not the only one.
Surprising exactly nobody, considering how much mortgage rates have risen, the housing market looks ugly.
Treasury Yield Curve inversion, a classic recession indicator, has been hitting levels not seen since the early 1980s.
GDP expectations in Germany have crashed.
Jim Quinn, of the Burning Platform, gives his take on how things are playing out in a “Fourth Turning” direction.
We’re getting a lot of official statements now on “central bank digital currencies,” with rollout dates in 2023. Here’s the US Federal Reserve, which kicked off a twelve-week pilot program with major US banks. The Bank for International Settlements (a sort of Queen Bee of central banks worldwide) said in October that it completed a successful test of cross-border CBDC payments.