Making the Cyclical Long Case for Chinese Equities
Quick thought exercise: ownership of what asset is more anathematic than any other at the moment? Chinese equities! You can’t touch em’ with a 10′ pole. Can you name a single reason why you or anybody else should own them? This…...
Global Macro Round-Up
FX drives everything, so ongoing weakness in the USD vs. CNY is one of the most fascinating things going on in the world right now, especially given US and China trade talks are specifically addressing this issue. USDCNY is currently testing…...
It Can Get Worse for China
Many of the research services I subscribe to were suggesting with increasing frequency as the summer wore on, and now fall, that I needed to own Chinese equities given how oversold they’ve become. However, in my view, they’re still nowhere…...
China Nears 25-Yr Relative Support vs. SPX as R2K Ascends to 30-Yr Channel Resistance
Below the ratio of the SSEC vs. SPX is nearing a 25-yr support line. That line sits at ~1.00 vs. the ratio’s current print of ~1.05. So, a few % lower. Knowing China, there will probably be some theatrics involved…...
Round-Tripping on the SHCOMP
I reviewed China in a Dec-16 post, focusing on what at the time seemed to be a building case for out-sized moves in USDCNY and the SHCOMP and largely predicated on how the ratio chart b/t these two items seemed to…...
Closing the Loop on Japan & China
In the past few days I’ve detailed important inflection points in both Japan & China, at least as I perceived them. The only thing I didn’t do was throw up a ratio chart b/t the two region’s equity markets –…...
Sina Review (Out-sized Moves Nearing in USDCNY & SHCOMP)
China’s equity market has been dead for the past year and it’s 9 mo hi/lo range now < 12%, about tied for lowest on record with similar prints in Mar-01 and Jul-14. Both of the above dates preceded robust expansions…...
SSEC Has Another ~20% of Additional Downside and is Likey to Remain in Relative Free-Fall
On the heels of our late Dec-15 post that suggested China’s depression was set to intensify in early 2016, I’ve updated that view via the SSEC plot below. The chart pattern over the past 18 months – base, large run…...
TED Spreads Lead & The Real Driver Behind The Fed’s Decision to Hike Rates
I’ve written a good deal this week about TED spreads blowing out significantly recently. Today I wanted to look at snapshots of the last few times TED spreads have blown out like they are now to see how the equity…...
CNH in Macro Driver Seat, Has Potential to Create Global Deflation Under PBoC Devaluation Campaign
The relationship b/t the USD and CNH increasingly appears to be the single most important global macro input factor. USD’s relevance has always been well appreciated but the closer I examine it v-a-v CNH, and China in general, the more significant…...