Daily Brief Macro: Marko Kolanovic Is Back With a Warning for Stocks and more

• Recent tech stock sell-off causing market volatility
• Limited contagion to broader market, some stocks even up
• Potential for more impact as uncertainty around DeepSeek continues

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• Innovation from China’s technology initiatives can provide help to cro ss over productivity but the benefit will likely only be modest due to the downgrading of the private sector.  
• The structural slowdown in capital productivity will dominate. Combined with a peak in the labor force, this is likely the mean trend growth will be below 3% from 2027 onwards.  
• Stimulative fiscal policy can lift actual growth above trend growth, but likely only modestly.   

• Amid U.S. President Donald Trump’s renewed tariff war and the Federal Reserve tempering expectations of a rate cut, Hong Kong stocks opened lower in the Year of the Snake, with the Hang Seng Index dropping more than 2% before recovering the 20,000 mark by midday.
• Despite the turbulence, market consensus suggests that the impact of tariffs is largely priced in, with some tech stocks defying the trend.
• Among major indices, the Hang Seng Index saw its steepest drop of 2.3% in the morning, hitting a low of 19,764 before closing at 20,075.

• WTI futures fell by 2.9% for the week ending 31/Jan on the back of trade policy uncertainty, growing U.S. crude stockpiles, and a strengthening dollar.
• WTI options Put/Call volume ratio increased to 1.31 from 0.85 (24/Jan) last week, as call volume rose by 78.1% WoW while put volume surged by 176.3%.  
• WTI OI PCR fell to 1.00 from 1.01 last week. Call OI rose by 8.9% WoW, while put OI grew by 6.9%.

• The Indian economy is projected to continue growing at a fast pace, with real GDP growth projections of 6.46% and 6.47% in 2025 and 2026, respectively.
• GDP per capita will most likely continue the growth over the next years, surpassing INR – ₹ (Indian Rupee) 140k (almost $1,629.68) in 2026.
• Both total investment (% of GDP) and gross national savings (% of GDP) are forecasted to stay stable until 2026, with both measures standing at around 33%-34% of India’s GDP.

• U.S. and Chinese tech giants are racing to integrate DeepSeek’s large language models into their products, seeking to capitalize on the Chinese firm’s meteoric rise that has rattled the global artificial intelligence (AI) sector.
• As of Sunday, Nvidia Corp., Microsoft Corp., Amazon Web Services Inc. (AWS), as well as the cloud-computing units of Huawei Technologies Co. Ltd. and Tencent Holdings Ltd. have added DeepSeek’s AI models to their offerings, aiming to attract more developers and subscribers.
• Microsoft was the first major player to make an announcement, saying on Wednesday that it had added DeepSeek-R1 to its Azure AI model library and embedded the model into its Copilot chatbot.

• For the week ending 31/Jan, U.S. natural gas prices dropped by 24.4% amid volatile weather forecasts and softening heating demand outlook.
• Henry Hub Put/Call volume ratio increased to 1.50 from 1.05 (24/Jan) the previous week as call volumes fell by 40.2% WoW, while put volumes declined by 14.7%. 
• Henry Hub OI PCR rose to 0.96 from 0.93 from last week. Call OI fell by 17.0% WoW, while put OI decreased by 14.6%.

• We review the 2024 ‘draw the line’ group forecasts for new home sales in China vs what happened, and put it in the context of the past forecasts.
• The ‘wisdom of crowds’ worked well in 2023, but 2024 was another unexpected negative, though not as bad as the surprise of 2022.
• You can now join this year’s ‘draw the line’ for new home sales, part of Real Estate Foresight’s 13th Annual China Property Outlook.

• The contribution of high value-added industries such as biomedicine to China’s total economic inputs rose last month, due primarily to an increase in capital inputs, a Caixin index showed Sunday.
• The Caixin BBD New Economy Index (NEI) came in at 33.8 in January, up 0.3 points from the previous month.
• That indicates that new economy industries accounted for 33.8% of China’s overall economic inputs.

• Exports /In Depth: Beijing’s ban on mineral exports to U.S. leaves traders scrambling
• DeepSeek /: Tech giants dash to include DeepSeek’s AI into their offerings
• Rail /: Expanded Russian customs checks disrupt China-Europe rail logistics