In today’s briefing:
- Technically Speaking Breakouts & Breakdowns – HONG KONG (October 18)
- Credit Cockroaches Incubating
- Did Trump Just Tank the Meat Markets?
- Rising US-China Trade Tensions Shifts Focus to the Next Five-Year Plan
Technically Speaking Breakouts & Breakdowns – HONG KONG (October 18)
- Hong Kong has pulled back this month as the U.S. trade war intensifies, however it remains in a Secular Bull Market.
- Materials and Healthcare sectors continue to outperform YTD, with Technology coming in a distant 3rd place.
- Hengan International Group (1044 HK) had multiple breakouts relative to MSCI Asian indexes and on an absolute basis. Analysts’ recommendations are split as the shares trade at their target price.
Credit Cockroaches Incubating
- Write-downs at two regional banks follow the cockroaches of First Brands and Tricolor bankruptcies, and should not be dismissed as isolated idiosyncratic events.
- Overly accommodative monetary conditions are stimulating markets to incubate cockroach eggs that may spawn as private credit malinvestment in the next recession.
- It is too early for these eggs to hatch, aided by the warm support of further Fed rate cuts. So, risk assets will probably keep on rising in the void of economic data releases.
Did Trump Just Tank the Meat Markets?
- Live and feeder cattle futures gapped lower on the open Friday, with some feeder cattle contracts touching even limit down – as panic selling hit the complex.
- The reason for the panic selling: president Trump.
- In an announcement on Thursday evening, Trump hinted that there could be a near-term deal reached to lower beef prices. How exactly such a deal would look like isn’t clear, though.
Rising US-China Trade Tensions Shifts Focus to the Next Five-Year Plan
- US-China trade tensions have spiked again following new Chinese curbs on rare earth exports. President Trump wants a trade deal with China this year, but China will not capitulate.
- Rising US-China trade tensions come before the fourth plenum for the Chinese Communist Party that lays the foundations of the next five-year plan. Eradicating supply chain vulnerabilities will feature prominently
- Private capital will play a crucial role in fulfilling the next five-year plan, but the government needs to ensure there is a level playing field in competing with state-owned enterprises.
💡 Before it’s here, it’s on Smartkarma
Sign Up for Free
The Smartkarma Preview Pass is your entry to the Independent Investment Research Network
- ✓ Unlimited Research Summaries
- ✓ Personalised Alerts
- ✓ Custom Watchlists
- ✓ Company Data and News
- ✓ Events & Webinars
