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China

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War, Fragmentation & Commodity Prices

Economic fragmentation will accelerate in the wake of the Israel-Hamas and Russia-Ukraine wars. China’s fis-cal support for its economy; a still-strong US economy, and the preparation for a wider war in the Middle East involving Iran will elevate volatility and bias oil prices upward. We remain long equity and commodity exposure via the XOP, XME and COMT ETFs.

Commodity & Energy Strategy by Ashwin Shyam
China: A Government Bailout?
According to BCA Research’s China Investment Strategy service, China's recently introduced debt swap program will help prevent mushrooming defaults, but it will not lead to an acceleration in growth. In August, the Ministry of Finance permitted 12 heavily…
Daily Insights
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Bridging The Fiscal Gap

We maintain our view that China’s economic growth in the coming months will remain lackluster. Beijing's recent measures to provide additional financing may help to bridge the gap in government spending in the rest of 2023 and into 2024, but the impact on growth will be very limited.

China Investment Strategy by Jing Sima, Arthur Budaghyan
Chinese PMIs Relapse In October
Tuesday’s China PMI release delivered a negative update on economic activity in October. The NBS’ Manufacturing PMI fell from 50.2 to 49.5 while the Non-manufacturing PMI declined from 51.7 to 50.6. Both measures fell below consensus expectations, and the…
Daily Insights
Rising Chinese Industrial Profits: Signal Or Noise?
China's industrial profits delivered a positive signal over the past couple months. Total profits expanded on a year-on-year basis in both August (+17.2% y/y) and September (+11.9% y/y). Rebounding industrial profits is typically a favorable development for…
Daily Insights
China's Property Market Adjustment Is Not Over
According to BCA Research's China Investment Strategy service, the property market has not cleared. Property market indicators suggest that China's real estate sector is still struggling to stabilize. Home sales and starts have entered their third year of…
Daily Insights
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China: Not Out Of The Woods

China’s economic growth will stagnate, at best, rather than revive. Lower valuations of Chinese equities are justified, and share prices have more downside. The RMB will continue to depreciate versus the US dollar.

China Investment Strategy by Qingyun Xu
Chinese Stocks Weaken Despite Upside Economic Data Surprises
China's CSI 300 equity index fell below its March 2020 pandemic low on Monday, bringing its loss since the February 2021 peak to -40%. Similarly, BCA Research's market-based China growth indicator – a broader measure of the performance of Chinese financial…
Daily Insights
Chinese Construction: Implications For Metals
Earlier this year we highlighted that China's property market dynamics pose a greater risk to the price of steel vis-à-vis copper. This view was based on the expectation that Chinese policymakers will direct financing towards the completion of unfinished and…
Daily Insights
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2024: The Year Of The Yen

There is a high probability that the global economy will tip into recession in the second half of 2024. A long yen position is an excellent hedge against that risk.

Global Investment Strategy, Foreign Exchange Strategy by Peter Berezin

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