The ritual of waking up at ungodly hours and scanning for information usually is quite boring outside of the half dozen wars and inept political system being imposed on the masses. But this morning there is a chill in the air and it isn’t just from old man winter.
Unrelenting selloff in Hong Kong stocks. But not everything is falling. Chinese bonds have done tremendously well.— David Ingles (@DavidInglesTV) January 17, 2024
This China story remains a fixed income play while stocks continue searching for a bottom.
🔉on 🙏🏼 pic.twitter.com/3B3egaulTu
It was in fact a bloodbath into the close today as the charts reflect the deflationary impulse hitting Asia due to the slowdown in China.
The entire Chinese markets sold off from the open and there has been no evidence of the government in Beijing looking to bail out domestic or foreign investors. In fact the long term chart is quite grim with decade old lows possibly coming into play.
The Hang Seng did not fare much better.
It’s long term prospects do not look much better than the Shanghai market.
China is clearly trying to export deflation to offset declines in domestic growth despite projections of an over 5% expansion projected for 2024 GDP.
China is exporting deflation now.— Stephane Deo (@StephaneDeo) January 16, 2024
Export prices are down a bit more than 10% YoY. pic.twitter.com/8UXme1oNkZ
Jay Powell had best thank the PBOC and China as those declines in prices along with stable energy prices keeping a lid on short term inflation inside the US economy. Otherwise the Fed might wake up one morning and see the same blood red markets in the US like Asia did this morning.
May we live in interesting times indeed.