1.15.24: US Shipping Vessel Struck by Missile Sparks New Inflation Worries Amid Rising Tensions

For Public Readers: Weekly Key U.S. and China brief market notes by Larry Cheung's Analyst Staff Team for our Public Email List

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Jan 16, 2024

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In our emails, we will provide the following coverage points:

Brief Overview of U.S. & China Markets
Macro Chart in Focus
U.S. & China Upcoming Economic Calendar
Chart That Caught Our Eye

U.S and China Markets Brief Snapshot 🇺🇸 🇨🇳

(Powered by our Channel Financial Data Provider YCharts)

S&P 500 Index: 4783.83

KWEB (Chinese Internet) ETF: $25.43

Analyst Team Note:
Rate cuts might negatively impact company earnings, contradicting the current optimistic projections.
Generally, the Fed cuts rates when the economy is heading for a recession, something that sell-side’s optimistic projections don’t seem to be accounting for.
Despite concerns about earnings headwinds and the impact of weaker inflation and nominal GDP growth on margins, there remains a bullish consensus on earnings growth.

Macro Chart In Focus

Analyst Team Note:
A US-owned commercial vessel, the Gibraltar Eagle, was struck by an anti-ship ballistic missile fired by Houthi terrorists today in the Gulf of Aden.
The Department of Transportation has also advised US merchant ships to steer clear of the area.
The attacks have escalated following US and UK bombing in Yemen in response to previous Houthi strikes on vessels linked to Israel. The Houthis have threatened further attacks in retaliation for Israeli actions in Gaza.
These developments have led to soaring insurance costs and rerouting of shipping, impacting global trade and raising the possibility of inflation due to delays and increased transportation costs.

Upcoming Economic Calendar

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U.S Economic Calendar (Upcoming Data Points)

China Economic Calendar (Upcoming Data Points)

Analyst Team Note:
China's offshore credit market, currently experiencing low levels of stress, faces upcoming challenges with significant bond maturities in the real estate sector, particularly in the second quarter where $10.5 billion in bonds are due.
Major developers like Gemdale Properties and Sino-Ocean Group are under scrutiny due to their large upcoming repayments amidst a continuing slump in the property market, indicated by a sharp decline in new home sales.
There are signs of support from the government, such as eased home-buying restrictions and bank support for struggling developers, which have somewhat improved market sentiment.