Note to Readers from Larry: In our November Monthly Slide Deck (where we asked you to join us), we discussed preparing for a large counter-trend rally in China on names such as Trip.com, Alibaba, NIO, Tencent, and the KWEB ETF.
If you’re a part of my public community, I’ve been trying to help you this entire time. Do you see it now?
These opportunities don’t come all the time. The higher Fed Funds Rate (cost of capital) is making investors much more choosy about where they park capital AND for how long.
Cash is king, with investors fleeing to the safety of cash funds at the fastest pace since the coronavirus pandemic as the Federal Reserve remains firmly hawkish.
Macro Chart In Focus
Analyst Team Note:
The price-earnings ratio of the benchmark MSCI Emerging Markets Index, based on trailing 12-month profits, has fallen below its price-earnings ratio based on estimated earnings for the next 12 months, showing that analysts expect earnings to fall faster in the future than currently.
“Earnings estimates in emerging markets are under pressure from weaker global demand and input cost inflation which is harder to pass on in that weaker demand environment. Banks, which have entered this downturn with low consumer exposure and strong balance sheets, may be relatively resilient.” - Bloomberg
Hawkish: “The Committee anticipates that ongoing increases in the target range will be appropriate in order to attain a stance of monetary policy that is sufficiently restrictive to return inflation to 2 percent over time.”
Dovish: “the Committee will take into account the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic and financial developments.”
Chart That Caught Our Eye
Analyst Team Note:
“La Niña has returned for the third consecutive winter, allowing for drier-than-average conditions across America's crop belt. Some farmers told Bloomberg that conditions are so dry that "fertilizer is evaporating from the soil, and plants are struggling to emerge from the ground."
The odds are stacking up that this winter's growing season in the Midwest is going to be a bad one. The latest government data shows drought is intensifying across the western half of the US.” - ZeroHedge
We want to take a moment to thank Interactive Brokers for being one of our Channel’s trusted Partners and to inform my audience of the special features they have given that our online friends here closely follow Chinese Internet stocks (BABA/Tencent).
Much of Larry’s audience is concerned about the US ADR issue of Chinese Stocks being delisted.
