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China

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Waiting For The (Policy) Shoe To Drop

Both the Chinese and US central banks will likely take policy actions in the coming weeks. What is the potential impact of a mortgage rate cut on China’s household consumption and the broader economy? Will the anticipated Fed easing cycle further lift the RMB exchange rate versus the US dollar?

China Investment Strategy by Jing Sima
The Surge In Chinese Exports Is Likely Unsustainable
Chinese export growth in USD terms accelerated from 7.0% y/y to a larger-than-expected 8.7% in August. China’s exports to its major trading partners (US, EU and ASEAN) were all growing in August on a year-on-year basis, though at a decelerating pace in the US…
Daily Insights
Chinese Deflation Pressures Worsened In August
China’s CPI and PPI both surprised to the downside in August. Consumer prices grew from 0.5% y/y to 0.6%, below the 0.7% anticipated. However, a 2.8% y/y surge in food prices (the fastest pace so far this year) overstates this headline figure. Core CPI…
Daily Insights
Bifurcated Demand For Semiconductors
Global semiconductor stocks have returned 50% YTD in USD terms, and a whopping 200% since their September 2022 lows. However, they may have peaked back in July. Our Emerging Market strategists highlight a significant bifurcation between the revenues of…
Daily Insights
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Cuts Are Coming, But At What Pace?

Our Portfolio Allocation Summary for September 2024.

US Bond Strategy by Ryan Swift, Robert Timper
China Is Stockpiling High-End Memory Chips
According to BCA Research’s Emerging Markets Strategy Service, China has been accumulating high-value memory semiconductors in anticipation of further US restrictions. Since October 2022, the US has been tightening rules that would limit China’s progress…
Daily Insights
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The Global Semi Industry: AI Haves And Have Nots
Special Report

There has been a decoupling within the global semiconductor industry. Demand for AI and advanced chips has been booming. Yet, sales of legacy and non-AI semiconductors have failed to recover. Given their spectacular run-up, share prices of high-end and AI-chip producers might continue selling off even if their sales continue to grow rapidly.

Emerging Markets Strategy by Qingyun Xu, Arthur Budaghyan
Sluggish But Not Collapsing Chinese Economic Conditions
Both leading PMI measures painted a sluggish picture of China’s economic conditions in August. The NBS composite PMI suggested that overall activity barely expanded (50.1) and that the manufacturing sector’s contraction unexpectedly accelerated (49.4 to…
Daily Insights
Trade Wars Don’t Work In A Multipolar World
According to BCA Research’s GeoMacro Strategy service, there are two main pressure points that the US can utilize against China. First, the US consumer market is the largest in the world. Despite having diversified away from the US, it remains a very…
Daily Insights
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Monthly Portfolio Update: Is The Fed Right To Declare Mission Accomplished?

Even after the Fed cuts rates, policy will remain restrictive for some time. Moreover, in history, stocks have tended to fall around the first rate cut. We remain cautious on the outlook for the economy and risk assets.

Global Asset Allocation by Garry Evans

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