Connect with us

Base Metals

There’s Something Rotten In China

There’s Something Rotten In China

Authored by Steven Vannelli via Knowledge Leaders Capital blog,

One metric I look at fairly often for various…

Share this article:

Published

on

This article was originally published by Zero Hedge

There’s Something Rotten In China

Authored by Steven Vannelli via Knowledge Leaders Capital blog,

One metric I look at fairly often for various countries is the relationship between the performance of stocks vs. bonds. The idea is straightforward enough: when stocks are outperforming bonds, it tends to be associated with a growing economy. When bonds are outperforming stocks, it is a tell that there is some sort of negative dynamic going on.

Why do I bring this up? In the US, stocks—represented by the SPY ETF—have just made a new high relative to the TLT ETF (which represents long-term US Treasury bonds). This would suggest that despite all the angst over inflation, the debt ceiling, and other issues, investors seem to taking a positive perspective.

This contrasts with China. In China, stocks have underperformed government bonds by about 50% since the beginning of 2021. This suggests there could be something rotten going on underneath the surface of the Chinese economy. Debt issues, housing issues, demographic issues, and geopolitical issues all could be weighing on sentiment toward Chinese equities and growth.

To further validate the theory that there is something rotten in China, I overlay the CNY/USD on the stock/bond chart. The CNY is weakening alongside this relationship of bonds outperforming stocks.

While last fall, the market began to discount the opening of China, now the dynamic seems to have changed. Copper did a good job signaling the upturn in Chinese GDP estimates for 2023.

With the Chinese reopening seeming to have less thrust than was anticipated, copper prices are falling again. This could telegraph a downturn in Chinese growth estimates.

Tyler Durden
Fri, 05/26/2023 – 12:35

Share this article:

Base Metals

White House Prepares For “Serious Scrutiny” Of Nippon-US Steel Deal

White House Prepares For "Serious Scrutiny" Of Nippon-US Steel Deal

National Economic Adviser Lael Brainard published a statement Thursday…

Share this article:

Published

on

Continue Reading
Base Metals

How to Apply for FAFSA

Students and families will see a redesigned FAFSA this year. Here’s how to fill it out.

Share this article:

Published

on

By

Continue Reading
Companies

Dolly Varden consolidates Big Bulk copper-gold porphyry by acquiring southern-portion claims – Richard Mills

2023.12.22
Dolly Varden Silver’s (TSXV:DV, OTCQX:DOLLF) stock price shot up 16 cents for a gain of 20% Thursday, after announcing a consolidation of…

Share this article:

Published

on

Continue Reading

Trending