Further to And India thinks it’s in same league as China? and And India thinks it’s China equal militarily?,
This will make Indians more delusional in thinking India is China’s equal.
US stocks edged higher on Friday [8 September], but had a weekly decline alongside global equities that have slipped in recent sessions as investors assess the outlook for regional economies and interest rates.
… interest rates could remain elevated for a longer period.
FT
————————————————–
On 6 September S&P 500 lost 0.8% and the Nasdaq Composite declined 1%. Two-year US Treasuries added 0.06 percentage points to 5%, and yields on the 10-year bonds rose 0.03 percentage points to 4.29%. All because
And
Data showing unexpected strength in the country’s services sector could mean interest rates remain elevated for an extended period. (Sentence added at 2pm on 7 September.)
===============================
On 5 September S&P 500 was 0,3% lower and the NASDAQ Composite was flat. Treasuries were a bit down. BUT
Oil hits $90 for first time in 2023 as Saudi Arabia and Russia extend cuts
FT headline
————————————————————————————-
On Friday and Thursday, the Treasuries, the S&P 500 and NASDAQ Composite closed almost flat. Holiday in Amerika on Monday
US stocks notched their biggest weekly gain since mid-June in a five-day period full of economic data that concluded with jobs data suggesting the economy could be on track for “soft landing” despite elevated interest rates.
FT market report on 2 September
——————————————————–
Last night (30 August) S&P 500 rose 0.4%, led by technology and energy stocks. Nasdaq Composite gained 0.5%. Treasuries closed more or less flat but they traded both ways in the day.
Original story
Further to Mr Market is feeling better after fever — Update on 26 August, Mr Market is now having the time of his life. The S&P 500 closed up 1.5%, the third successive session of gains and its biggest daily climb since early June. Thank The Magnificent 7. The Nasdaq Composite rose 1.7%. Its largest one-day increase in a month.
Reminder: On Monday the S&P 500 climbed 0.63% and the Nasdaq Composite advanced 0.84%.
US stocks rallied and Treasury yields dropped on Tuesday because data showing signs of a slowdown in the labour market. Mr Market thinks would ease pressure on the Federal Reserve to further raise interest rates this year.
It won’t affect the above because he also a populist: Why the PAP is the real “facking populist” not Jamus.
Seriously, we’ll still get the “goodies” (“Ownself pay Ownself”) because the PAP millionaire ministers have ensured that the elected president has no power, something TKL alluded to when he asked why have an elected president with no power.
It could be a really good idea to vote for the clown TKL to try to show the PAP of the folly with persisting with the idea of an elected president to safeguard the reserves. The judges gently suggested an alternative that was rejected.
Another good reason to vote for him is to show up the stupidity of the millionaire ministers in setting the eligibility for president for “public” sector candidates so low. I mean just because a desk jockey PAP running pet became Speaker, she could be eligible to president. Yes I repent of this: Malay PAPpy that can thrash Chin Bock. Related: More on Hali’s judgement between 2007 -2011/ Meritocracy? What meritocracy?
If he wins, he won’t be able to do anything to constructive or destructive. But: When a ceremonial president goes “rogue”
The only real problem is that he’ll behave like Estrada or Duerte, presidents of PeenoyLand. Not the killings but his talking cock will bring international shame and ridicule.
Personal note:
Funnily enough I worked with two of the candidates. I joined MAS as a junior officer in MAS when NKS was already a rising star. Due to my work I had dealings with him. Very competent guy. Fits LKY’s idea of what the president should do except that he was never a PAP person.
Many years later (around 2008), I and one Mathew John and another helped TKL when he was trying to help the mini-bonders etc. (Remember them?). There were a few early successes but he was very upset by the government’s reaction to the situation (refusing to follow the HK govt response of forcing the banks and finacial cos of paying out)) and got more and more “garang”. I’m sure people like Goh Meng Seng who advised him had a lot to do with his attitude.
Btw, one of his personally selected aides at NTUC warned me that I’d not be able to work with him for very long. He said that TKL liked balls-carriers more than good advice. His judgment was warped by flattery.
Starbucks played its part even though its coffee is lousy. So far only the descendants of the Viet Kong have resisted its BS successfully, like the Viet Kong resisted the US.
https://www.bbc.com/news/world-asia-66167222
But a warming world is not good for
world can produce enough beans to fulfil growing demand as climate change hits yields.
And we are the regional (and a global) financial centre? But to be fair, it has done more IPOs than HK.
No not because Grandpa Xi is showing at the Brics conference that China is the top dog in world outsude the developed world: Where China is the Hegemon.
India keeps thinking that its rival is China, despite China leaving India to eat China’s dust: And India thinks it’s in same league as China? and And India thinks it’s China equal militarily?
Elections will be held this year in five of India’s 28 states, including heavyweight constituencies Madhya Pradesh and Rajasthan. The next Indian general election is expected to be held in India between April and May 2024
But inflation is a problem. Tomatoes and onions are difficult to get hold. India has imposed a 40% export tax on onions because of higher domestic prices.
Retail prices of onions in India have risen around 20% year-on-year, averaging at around 30.72 Indian rupees (37 US cents) per kilogram on Aug. 19. India is the world’s largest exporter of onions, and contributes over 12% of global onion trade.
Related post: India is the rice exporting hegemon
China’s trade with its best customer and biggest rival (the US of A)shrank by a fifth in July compared with a year earlier.
:”So what?” says Grandpa Xi.
Despite China’s expertise in electric vehicles (EVS) and in making them (Another lunch China is stealing) and subsiding their sales, the public prefers internal combustion vehicles because they are cheaper.
The ex-Speaker of parly should have called the PAP “****ing populist” not Jamus because
25 August NY time
The sell-off in US government bonds, which took yields on long-term debt to a 16-year high at the start of this week, continued. After Powell’s comments futures markets on Friday pushed their expectations for a cut in the federal funds rate to June 2024 from April. Traders expect the Fed at its September meeting to hold rates steady at a 22-year high.
But S&P 500 finished a choppy session 0.7% higher, and advanced 0.8% for the week. The Nasdaq Composite climbed 0.9 per cent, and rose 2.3 per cent over the week. On Thursday S&P 500 closed 0.67% higher, while the Nasdaq Composite was up 0.94%.
Recovery continues.
Original story on Thursday morning our time
Last night, 10-year US Treasuries fell 0.13% to 4.20% after reaching a 16-year high earlier this week.
The S&P 500 finish 1.1% higher, while the Nasdaq Composite was up 1.6%: a 3.2% rise in Nvidia propelled these gains.
Recent posts: 10-yr Treasuries at highest level since November 2007 and S&P 500 could pull back: Update on 19 August.
This time from the Germans and Japanese.
China became a car-exporting tua kee in large part because of its dominance in electric vehicles.
Even Tesla is exporting from China. And brands from my younger days like MG and Volvo are really Chinese today.
As investors try to accept the reality of an economy that refuses to slow, 10-year Treasuries hit new 16-year highs: up 0.1 percentage points to 4.35% before pulling back a little at the close of NY trading.
(Related: S&P 500 could pull back: Update on 19 August)
The US spends more on defence than the next top 10 countries combined but where does it get the money from.
It borrows. Its treasury debts was US$30.93 trillion in 2022
Of the total 7.6 trillion held by foreign countries, Japan and Mainland China held the greatest portions, with China holding 868.9 billion U.S. dollars in U.S. securities.
https://www.statista.com/statistics/246420/major-foreign-holders-of-us-treasury-debt/
Btw, the FT reports that US Treasury reports that Treasuries owned by Japan and China — the two biggest owners of US debt — fell by 11% and 12% respectively, over the year to June.
Check out this graphic by clicking on it. Tells u how much our millionaire ministers put in US treasuries.
Sources: Peter G Peterson Foundation; Stockholm International Peace Research Institute
China and Russia have a point when they call the US “warmonger”.
More interesting is where the US gets the $ to spend so much? The Americans are hedonists not savers.
Akan datang.
Hint, hint LOL.
It and the construction sector drive the Chinese economy. A lot more than these sectors do in developed countries.
Its present policy of doing almost nothing has to change. Hopefully a recent flurry of BS announcements of changes is a prelude to some major policy announcements. It needs to bailout, or restructure the finances of local govt and property developers. If it doesn’t want to bailout, it has to make developers and local govts “eat bitterness” by writing down their assets and going bust.
The weak rouble offers Russia an incentive to boost oil exports just when Saudi Arabia reduces supply, partly to support Russia, a fellow member of Opec+.
Can the Bear resist the temptation? A weak currency offers a massive incentive to boost oil exports just when Saudi Arabia reduces supply. But it will not please the Saudis who want high oil prices because of its spending plans (think golf, Newcastle Utd, and Footie leagues’ transfer spending compared and Footie transfer records R leagues’ revenues).
Russia needs money to fund its special military operation.
Brent is now around US$84.
Update on 22 August at 6.20am: S&P 500 closed 0.7% following a sharp sell-off last week. The Nasdaq Composite gained 1.5%. But 10-year Treasuries hit new 16-year highs: up 0.1 percentage points to 4.35% before pulling back a little.
Quiet day on Friday: Yields on benchmark 10-year Treasuries slipped 0.06 percentage points to 4.25% oFriday. The S&P 500 slipped marginally falling 2.1% for the week. And the Nasdaq Composite fell 0.2%, falling 2.6% over the week.
S&P 500 could pull back: Update on 19 August
Its weekly decline of 2.6% is its worst performance since the US banking crisis in March.
The decline has in part been led by the Magnificent 7 US megacap tech stocks — Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia and Tesla ( The Magnificent 7 who protect the S&P ). They lost more than US$900bn in value over three consecutive weeks of falls. Their worst combined market capitalisation decline this year.
Because
“Investors have been selling bonds recently with the view that central banks are not thinking about cuts as the labour market is tight and core inflation is sticky,” said Andres Sanchez Balcazar, head of global bonds at Pictet Asset Management talking to the FT.
The Bald Eagle gets thwarted.
Indian buyers are willing to pay up for Russia’s crude from producers such as Lukoil and Rosneft the FT reports. So the Russians don’t feel the effects of the West’s attempts to cap the price of oil (US$60) the Russians sell.
The u/m reminds be of conversation during the first 6 months of Covid. My ex-boss and I asked each other if we were OK financially. He said if only he had bot the S&P 500 during the Great Financial Crisis. I know what he meant.
“What’s wrong with collecting money?” LKY
Buffett agrees:
All this money goes into Buffett’s secret sauce.
Only in the one country with two systems there’s a HK$ price and a mainland price for stocks with a dual listing.
Quiet day on Friday: Yields on benchmark 10-year Treasuries slipped 0.06 percentage points to 4.25% on Friday. The S&P 500 slipped marginally falling 2.1% for the week. And the Nasdaq Composite fell 0.2%, falling 2.6% over the week.
Update at 5.45am in 18 August 2023 — Yields on long-term US government debt on Thursday neared their highest level since 2007. The Nasdaq Composite fell 1.2% while the S&P 500 gave up opening gains to close at 0.8% lowe. Investors are thinking that the Federal Reserve would successfully avoid a recession while curbing inflation through higher interest rates.
Yields on benchmark 10-year Treasuries reached 4.328%, up 0.07% on the day, very near October’s 4.335% intraday high. They closed at 4.28%.
Update at 6.00am on 17 August 2023 — Yields on longer-term US Treasuries reached their highest levels since October (yield on the 10-year note rose about 0.06 percentage points to 4.28%) and US stocks declined (S&P 500 closed 0.8% lower and the tech-focused Nasdaq Composite dropped 1.2%) as investors assessed minutes from the Federal Reserve’s July meeting, and the outlook for interest rates.
(Updated at 6.15 am on day of publication)
Down 1.2% today because as longer-term Treasury yields hit their highest level this year because strong retail sales data made the markets worried that US interest rates could remain higher for longer.
Maybe to the lows of early August, July, June, May, April and if really unlucky to March or Dec 22?
You heard it first here.
Another ominous sign, before today’s retail numbers, that the Fed could keep them interest rates higher for longer than conventional wisdom expects is the behaviour of corporate borrowers. The FT reports that companies don’t expect interest rates to fall any time soon and so keep on borrowing, They grit their teeth and live with high borrowing costs.
I’m not one of those constructive, nation-building S’poreans who think the sun shines from Tharman’s ass. And who find find the Economist’s comments on our CPIB “deeply offensive and uninformed”.
This is why The Economist’s charge that simply because the CPIB reports to the prime minister it can’t be independent strikes many Singaporeans as deeply offensive and uninformed.
T. K .Lim
High commissioner of Singapore
London
When the news of the incident in question went public, I got a call from KL, from an old connection who like me is semi-retired. Like me he invests, but he also does deals: he was once an adviser (Others would say “crony”) to Tun M and Anwar. He is proud that he and Anwar are friends even when the latter was jailed. I suspect he was (like others) funding Anwar when he was in the Wilderness. I was hoping he’d get a post in Anwar’s govt: no such luck. Btw, he’s also a friend of Badawi (Remember him?)
Sorry for the meandering.
He said that in the UK, Oz, NZ, and Canada the anti-corruption investigators never ever have to inform the PM or ministers of their investigations. The latter would only hear of the matter just before someone is charged.
Even in M’sia, he said the PM would be told of pending charges just before the charges are laid. He pretended to be offended when I laughed at this assertion. I said I had assumed Mrs Najib (aka First Lady of M’sa or FLOM) had received a call from the M’sian CPIB telling her that she and her hubbie were bring investigated and could they destroy any evidence that proved they were corrupt.
Back to the original comment, the High Commissioner, it seems reasonable to assume, is trying to muddy the waters between reporting lines on purely administrative matters (budgets, etc.) and seeking permission to investigate or charge. This misrepresentation, I find deeply offensive and uninformed misleading.
Related post: Nation Day quotes: Not from the constructive, nation-building media
While the Container sector is looking for a bottom after having a great pandemic
other sectors are partying or in the case of Dry Cargo feeling relief
Indonesians are champion talkers. Thais also talk a lot.
Surprisingly Indians and Chinese don’t talk so much.
Looking good for a ninety something. (LKY at his age was rewriting his will time and timeagain leaving behind an enjoyable spectacle of black comedy at its best: White Horses slimimg one another in public.)
Some context: He’s there with the Tech Magnificent 7:
Better still he makes the ESG wokes klook like a bunch of wozzies
His secret sauce is lots and lots of energy with a touch of Apple and insurance
OK OK
BUT
AND
Berkshire now leads the S&P over 10 years, too — 201 per cent versus 200 per cent, or about seven-hundredths of a percentage point of outperformance a year, a teensy-tiny difference, according to S&P Capital IQ.
FT’s Robert Armstrong, one half of the Unhedged team. His ethnic Chinese junior is a lot more smarter though.
According to the International Energy Agency, an official (and not very good) forecaster, global oil demand reached a record high of 103m barrels per day in June. The surge came from increased oil use in power generation, better than expected economic growth in OECD countries, rebounding air travel during the summer months and surging oil consumption in China, particularly for petrochemical production
Demand was on track to average 102.2mn b/d in 2023, the highest ever annual level. Global demand will have risen by 2.2mn b/d over the course of the year, with 70% of the growth coming from China, the IEA guesses.
The IEA also guesses that prices will continue to rise as OPEC+, the world’s largest oil cartel and allies, cuts production.
Btw, consumption data shows global efforts to cut carbon emissions are yet to have significant impact. N0 one is Walking the Talk of cutting carbon emissions.
Watch NY tonite. All other markets will be quiet and nervous.
The US sold US$23bn in long-dated bonds at a yield of 4.189%,
a shade above market levels ahead of the bid deadline. The coupon on the new debt
was the highest since June 2011 reports the FT.
The FT also reported that Action Economics said the soft pricing wrongfooted markets,
“Yields have spiked higher, led by the long end in a bear steepening trade.”. This implies investors are expecting the cost of money to rise in the future, something the market is bot expecting according to conventional wisdom.
FT
The yield on the benchmark 10-year Treasury note rose 0.09 percentage points to
4.1 per cent, reversing declines in the first few hours of the trading session. The
two-year yield added 0.04 percentage points to 4.84 per cent. Bond yields rise as
their prices fall.
Japanese and South Korean shares surge on return of Chinese tour groups
FT headline
So should SE Asian markets because China is moving to scrap pandemic-era restrictions on overseas group travel to 78 countries.
The Yellow Peril and now the big spenders.
The average Chinese visitor spent 42 per cent more than that from the US and more than double that from Japan, according to the Korea Tourism Organisation.
Germany’s car industry must also tackle its growing China problem. Having benefited from the Asian giant’s rapid growth in recent decades—in the second half of 2022 Germany’s three big car companies made around 40% of their revenue there—they are now suffering from a reversal of fortunes. Volkswagen has just cut its global delivery forecast owing chiefly to slowing Chinese sales. Geopolitics are liable to make things worse. And Chinese rivals have started expanding abroad, particularly in Europe. Last year, for the first time, China exported more cars than Germany: around 3m and 2.6m vehicles, respectively.
… In China’s fast-growing market for evs, the vw brand is an also-ran, with a market share of 2%.
https://www.economist.com/business/2023/07/31/what-if-germany-stopped-making-cars
Your premium German car is NOT made in Germany
Nearly three-quarters of passenger cars sold under a German brand are now made abroad. Last year a mere 3.5m vehicles left local factories—about as many as in the mid-1970s.
https://www.economist.com/business/2023/07/31/what-if-germany-stopped-making-cars
But the Economist’s “The world in brief” on 9 August 2023, (Btw remember this: https://www.straitstimes.com/singapore/politics/singapore-s-envoy-to-britain-refutes-economist-s-claim-that-cpib-cannot-be-independent?)
People are struggling with the cost of living: headline annual inflation hit 6.5% in February—driven by increasing food, transport and house prices—before easing to 4.5% in June.
… two cabinet ministers were cleared of wrongdoing over the renting of colonial-era mansions. The story looks bad in a country where cramped Singaporeans grapple with finding affordable housing.
… the prime minister, says that the solution to graft lies not with more checks and balances, but with more honest people. That might be placing too much faith in human nature.
Economist’s “The world in brief” on 9 August 2023
The millionaire PAP ministers missed the plot on the mansions for rent. The ang moh writer got what annoyed S’poreans: “cramped Singaporeans grapple with finding affordable housing”.
As to inflation, it’s the topic that cannot be mentioned except in the context of ownself-fund-ownself vouchers (I used mine to buy roast ducks) and that it’s coming down.
As for graft, PM isn’t doing what pa used to do, “Put the fear of God or LKY into ministers or bureaucrats thinking of accepting private sector goodies.
Especially as it’s Mama time again: the turn of an Indian to be president. Their turn seems to come out most of the time, so much that we had to a reserved for Malays (whatever the word means: “Malay presidency” is “Calling a deer a horse”? and “Malay race” created by ang mohs, not the Malays).
Gupta is the real deal.
He runs a low cost regional bank.
StanChart’s
targeted 60% ratio of costs to revenue is higher than the 55% that HSBC managed last year, in adjusted terms, and the “below 40%” target of Singapore’s DBS
https://www.reuters.com/breakingviews/soaring-stanchart-still-has-lots-work-do-2023-07-28/
But he’s not just a cost-cutting banker from Citi. DBS’s, vaunted (mainly in our constructive, nation-building media but also in the int’l business media), digital services are very good. The only problem from my perspective (I recently updated my ancient POSB passbook account into its digibank) is that the digital offerings are prone to “Oops, something went wrong. Try again later”. I try again a few minutes later and there are no problems. OCBC’s and UOB’s digital banks are BS, or so I’m told.)
And from the perspective of millionaire PAP minister’ perspective, he’s a slave driver.
“it’s not because [he] want[s] people to work all the time” … “It’s just that I believe that work is a part of life.”
Constructive nation-building social media
He might just agree to be president.
DBS CEO Piyush Gupta disposes of 100,000 DBS shares at over $34 apiece
…
Following the sale, Gupta is deemed to be interested in 2.19 million shares in DBS which are held under a trust arrangement.
https://www.theedgesingapore.com/news/insider-moves/dbs-ceo-piyush-gupta-disposes-100000-dbs-shares-over-34-apiece
It’ll be good to have a president who was already filthy rich. Not like Nathan or Hali who needed their salaries to get filthy rich. LOL.
And the PAP can tell FTs that we love you guys so much that we make an FT president. Then maybe the FT will stop KPKBing that S’pore is not FT friendly. It’s not friendly to White Foreign Trash (they love to trash S’pore because they have to pay the rents from their own pockets) who are pretending to be FTs.
Have a good National Day.
If Ukraine wins, the EU will have a massive problem on its hands, how to keep its promise that Ukraine will be a member.
It’ii be 5th largest member by pre-war population and the poorest. It’s really dirt poor.
Best for the EU and the its members (especially the poorer members) if the conflict is frozen. Putin has friends, and it’s not only Trump.
Choose wisely a uni course.
Yes, Yes this is a UK study . But going by the importance parents here put on getting into Medicine, Economics, Maths and Engineering courses and not doing English, Creative arts or Social care , I think that it mirrors the situation in S’pore.
Wonder why Law not on list? I can understand why Accountancy and Biz studies not included in the UK study: social prejudice against technical subjects.
But your choice of parents is EVEN important according to another UK study.
“Attended private school” means parents who can afford it: though there are scholarships for the smart but poor kids (unlike here, the home of millionaire PAP ministers where tertiary govt scholarships are blind to wealth). “Eligible for free school meals” are the really poor plebs.
As are Indonesians, Kenyans, Nigerians and Mexicans.
Kanna con by Russian BS.
In five countries (see below) — India, Indonesia, Kenya, Nigeria and Mexico — an absolute or relative majority of respondents held positive views of Russia.
The most negative opinions about Russia were to be found in north America, Europe, Australia, Japan, South Korea and Israel (see below).
The richer a country and its people are, the less they are inclined to believe Russian BS.
People from China have not be polled. Wonder why?
Btw container shipping giant Maersk warned that a contraction in global trade would be longer and deeper than feared, as companies cut their inventories in the face of recession risks in Europe and the US.
Why the fall in inflation is temporary
The UN’s food-price index, which measures international prices across a basket of commodities, rose by 1.3% in July compared with June. Vegetable-oil prices increased by 12% amid uncertainty triggered by Russia withdrawing from the deal that allowed Ukraine to export food from the Black Sea. Rice prices jumped by 2.8% after India announced a partial ban on rice exports.
Economist’s Daily Briefing
Read: India is the rice exporting hegemon
The other reason is oil prices have rallied since the end of the second quarter, however, reaching three-month highs this week because of tighter supplies. Brent crude on Friday settled settled 1.3% higher at U$86.24 a barrel. Saudi Arabia on Thursday said it would extend its production cut of 1mn barrels of oil a day for at least another month.
(The following was added at 4 pm on 6 August 2023)
———————————————-
Brent hit a four-month high of $86.65 a barrel on Friday after Ukrainian drone strikes on military vessels/
——————————————————————————————————-
And read: Inflation times ahead,
Wildfires are sweeping through many Mediterranean and south European coumtries
GDP growth will be affected in Greece, Croatia, Spain and Italy because tourism is impt in their economies. Tourism was affected by the pandemic, and now fires.
Performing well, unlike China: ‘Ex-China’ Asian investments attract ang moh $
Further to What heat does to us/ Humidity danger zone/ Heat exhaustion v Heatstroke, as the short respite of cooler temperature has ended, there more on staying safe.
“You’ve got a backdrop where earnings are actually falling and bond yields are going up,” Paul Jackson, global head of asset allocation research at Invesco told the FT.
He went on “It’s not necessarily the best environment for stock markets, which, let’s not forget it, had a very good start of the year.” and “I think there is maybe a bit of profit-taking going on that is being helped by the rise in bond yields and the Fitch downgrading of US government debt.”
Stay safe. Trade/ invest wisely.
Ashmore is a specialist UK fund manager in emerging equity and bond markets. If investors are bullish about these markets, its shares soar. If emerging markets are unfashionable (as in recent years), it morphs from a condor into a dog with fleas on it.
FT’s Lex points out that Ashmore shares have recently lagged behind the emerging market bonds they generally track.
Ashmore shares have decoupled from EM bonds
Last night in NY, yields on 10-year Treasuries were up to almost 4.13%: the highest since early November.
“When the 10-year yield was above 4 per cent back in the [autumn] of last year, the stock market was 20 per cent lower,” said said Matt Maley, chief market strategist at Miller Tabak + Co, talking to the FT. “[I]t’s going to be very tough for this expensive stock market to keep rallying in the same way it has so far this year.”
Anyway, it’ll be another bad day here today. But not as bad as yesterday.
UK merchants like Jardine, Matheson and Sassoon smuggled smuggled opium into China. Today China feeds US demand for synthetic opioid .by selling to Mexican drug gangs the chemicals to make fentanyl.
Wonder if GIC kept the faith in Glencore? Glencore: Great GIC idea in ’09, ’11 but in ’15?. It was a good investment that went bad in 2015. It nearly went bust.
But it’s a dog that has sprouted wings.
A lot of it has to do with
Its managers (they all have big stakes in Glencore) were lucky. It didn’t sell its coal mines, opting to run them down while using the cash flow to invest in “green minerals”. Anglo American late 2021 listed its coal operations and distributed most of the the shares to its shareholders. Those who kept it are laughing all the way to the bank. AA sold its 8% stake in 2022.
The fickle finger of fate at work.
(The real Magnificent 7 were mercenary killers who protected a Mexican village for money, then for pride.)
S&P 500 is up more than 19% in 2023 including 3.1% in July. The increase marked the fifth consecutive month higher for the blue-chip index and the longest such run since the summer of 2021. Investors bot because inflation was following and growth resilient.
For the first five months of 2023, though, the increase in benchmark indices was driven entirely by Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia and Tesla: the Magnificent 7 megacap groups. Microsoft and Alphabet, which are juicing up their software with machine learning, are up by around 40%. Nvidia, maker of AI-friendly chips, is up 215%, pushing its market value above US$1trn.
“The giddy optimism around AI doesn’t look like cooling anytime soon.”
Btw, do remember that the S&P 500 has been underperforming. S&P underperforms ex dogs.
Unrelated post: The blogging 7 & Magnificent 7, the movie.
(Update on 1 August at 5.30pm:
Reality seems to be sinking in with more bad news: The CSI 300 and Hang Seng index both gave up 0.4 % as investors worried over the country’s stalled post-pandemic recovery.)
China yesterday released a bad set of economic numbers. But
Loos like Chinese equities bulls are like this guy
In Why Japanese funds are returning home I wrote: “And now there’s the prospect of rising interest rates with the Jap central bank’s recent tweaks to yield curve management.”.
Here’s what has happened since the yield curve was tweaked a few days ago.
Japanese investors are some of the biggest owners of bonds in the US and Europe (more than US$2 trn at the end of 2022, with large holdings in the US, France, the Netherlands and Germany.). Years of a strong currency and higher returns elsewhere had made foreign assets more attractive to own.
But Japanese investors have been net sellers of foreign assets over the past 18 months despite better (a lot better) yields in the US and Europe and a domestic bond market where the BoJ has kept borrowing costs at very low levels.
An important reason
Overseas debt has become an increasingly unappealing prospect for many Japanese investors because of the soaring cost of hedging against swings in the value of the yen.
And now there’s the prospect of rising interest rates with the Jap central bank’s recent tweaks to yield curve management.
Higher rates in the rest of the West?
Thoughts of a Cynical Investor 