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Tag: coronavirus

Corona virus, COVID 19

China Reopening: Underestimating the Impact on Global Economy, Markets (Szn 5, Ep. 2)

With Mike Edwards, Weiss Multi-Strategy Advisers

Mike Edwards, deputy chief investment officer at Weiss Multi-Strategy Advisers, joins the podcast to discuss China’s post-Covid reopening and why its impact on global markets is not being fully priced in by investors.

Content Highlights

  • China’s abrupt U-turn over ‘Zero Covid’ is unquestionably one of the biggest changes to take effect in the global economy over the last few months (2:23);
  • There have been reservations about this reopening, but it is happening with authoritative force and will have a major positive impact (5:08);
  • What about the US de-coupling from China and the embattled real estate sector? (11:00)
  • Where this will be felt most is in markets that have exposure to the Chinese consumer. It also points to Europe and emerging markets outperforming the US (17:54);
  • Chinese consumers were far more restrained than their US counterparts during Covid and have been slower to return — especially tourists. This is not just a one-off in terms of the resurgence of Chinese travel and services (24:20);
  • What to make of the latest economic developments in the US, especially with the consumer? (27:31);
  • Weiss’s house view is that the US will avoid recession this year (34:02);
  • Background on the guest (37:49);
  • China can re-emerge without the US as a major partner (51:36);
  • After some consolidation, the US economic and market cycle is marked by investors seeking to put money to work — slowly (57:18).

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Not investment advice!

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‘Options Mike’ on the Coming Year-End Rally for Stocks (Szn 4, Ep. 33)

This podcast episode brought to you by Covey — Covey is designed to find, reward, and train the next top investment managers —from any background—that anyone can copy, so everyone can win.

Michael Pisani, aka Options Mike, joins the podcast to discuss why he’s anticipating a year-end rally in stocks. 

Content Highlights

  • It’s been a tough year for stocks and risk assets. That may be about to change (2:10);
  • Jerome Powell and the Fed have twice this year fooled markets into anticipating a pivot. But something has changed and the FOMC is no longer unanimous with its hawkishness (4:04);
  • There is still a lot of cash still on the sidelines (6:46);
  • Specific areas of the market Pisani likes here. And specific stocks, primarily Ford (F) and to a lesser extent General Motors (GM), both as longterm plays (11:42);
  • Another stock he’s bullish on: Snowflake (SNOW) and several that are candidates to go to zero (12:33);
  • An easy contrarian play: ARK Innovation ETF (ARKK). Yes, really (15:46);
  • Pisani’s take on cryptos (18:31);
  • Background on the guest (23:44).

More on Options Mike

Not intended as investment advice.

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China Unrest: A Synopsis

The following is an amended version of the Nov. 28 Daily Contrarian. This briefing and accompanying podcast are released to premium subscribers each market day morning by 0700. To subscribe, visit our Substack or Supercast.

This weekend saw numerous protests in China as anger spread over the country’s strict Covid lockdown policies. The catalyst was a deadly fire at an apartment building in Urumqi, in the country’s far-western Xinjiang region. Apparently the Covid policies hampered rescue efforts. It quickly spread to other regions. Demonstrators in Shanghai clashed with police yesterday. In Beijing, protests apparently went all night and took demonstrators near the infamous Tiananmen Square, where officials still insist nothing happened in June 1989.

Economically, the damage has been pretty limited so far. The People’s Bank of China said it would cut the reserve ratio for banks (effectively the country’s interest rate). The Chinese yuan weakened against the US dollar. Stocks in Shanghai, Shenzhen, and Hong Kong all sold off but not terribly (down ~1% each).

The Latest Round of China Protests

China protests
Source: Reuters

Protests are nothing new to China. Nor are protests over the country’s Covid policies. What is new is that Xi Jinping is being specifically targeted and even urged to step down. Some talk of how this is the biggest deal since Tiananmen, but pretty sure we’ve heard that before. And Tiananmen didn’t just materialize overnight like this, but followed what were literally months of protests. So the safe bet here is probably that this will fade away in a few days or weeks, tops.

It still bears watching of course, especially on a day when there is little else in terms of known events that will move markets. Friendly reminder not to believe everything you hear on Twitter or in the western media. Yes, the regime in Beijing definitely has its friends in the western press (cough) but there is just as likely to be disinformation; for example about this being pro-democracy protests that will bring down Xi and the CCP. Both are extreme long shots, at least at this point.

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