Make sure to check out Interactive Brokers above as idle cash now will yield more than 4.5% as the Fed just raised rates.
Key Investing Resource: Strategist Larry uses Interactive Brokers as his core brokerage. Feel free to check out IB. I currently park excess cash at Interactive Brokers. Check it out. It’s a great brokerage.
In our emails, we will provide the following coverage points:
Chinese stocks listed in Hong Kong are at their deepest discount to its mainland peers in fifteen years.
The Hang Seng China Enterprises Index fell close to a two-decade low, while
Factors contributing to the selloff include China's housing slump, deflationary pressures, and uncertainties about US interest rates.
Despite efforts by Chinese commercial lenders and the central bank to maintain borrowing costs, the lack of more aggressive economic stimulus has disappointed investors.
Macro Chart In Focus
Analyst Team Note:
So far in 2024, the Russell 2000 (-2.2%) underperforming compared to the S&P 500's 1.7% gain, the most significant relative underperformance since 1997.
Throughout most of 2023, small stocks struggled due to recession fears and high interest rates, but they rallied towards the year's end amid optimism about a potential Federal Reserve rate cut.
The December retail sales report, which showed an unexpected rise in headline and core sales, suggested an acceleration in consumer spending
However, this surge in spending was actually attributed to changes in seasonal adjustment factors, rather than an legitmate increase in consumer activity.
This year's seasonal adjustments were more favorable compared to last year, artificially inflating the December figures. These seasonal factors are expected to reverse in January, indicating that the December gains were more an artifact of statistical adjustments than an actual change in consumer behavior.
Chart That Caught Our Eye
Analyst Team Note:
The cost of fuel transportation on key global trade routes has significantly increased due to recent attacks on Red Sea shipping. As a result, many tanker companies have started avoiding the Red Sea and are rerouting their vessels around Africa, leading to a sharp rise in transportation costs.
The day rate for shipping gasoline from northwest Europe to the US east coast has nearly tripled since the start of the year, reaching around $38,000 a day.
The cost of transporting fuel from the Middle East to Japan has risen by two-thirds in just a week.
This rerouting has reduced the availability of ships for spot cargoes, leading to a tighter supply in the spot market and contributing to the soaring transportation costs.
Sentiment Check
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