China

Buying What Glitters

Feb 18, 2025 2 min read paid

A late-day rally sent the S&P 500 up 0.24% to a new record high of 6,130. But gold had a much better day, jumping 1.8% to a record $2,952 per ounce. This "safe haven" asset is now up 10.6% ytd, better than the S&P 500's 4.5% and bitcoin's 1.8% gains so far this

Ed Yardeni
Eric Wallerstein

The Great (Yield) Fall Of China

Jan 2, 2025 3 min read paid

Today's Wall Street Journal reports: "Now, as Trump prepares for his second administration, American companies have largely gone silent about the importance of the U.S.-China relationship. That is because American businesses no longer see China as the land of opportunity. The promise of China’s market has faded as its once-booming economy hits trouble." We've been saying for a while that China

Ed Yardeni
Eric Wallerstein

Whatever It Takes? China Is Stimulating, Again.

Dec 26, 2024 3 min read paid

There may soon be fewer jobs for economists in both the US and China. On Monday, December 23, Elon Musk (one of the DOGE Boys) tweeted that the "Fed is absurdly overstaffed." On its website, the Fed in Washington brags: "The Federal Reserve Board employs more than 500 researchers, including more than 400 Ph.D. economists, who represent an exceptionally diverse range of interests and specific areas

Ed Yardeni
Eric Wallerstein

Is the Fed Inflating? Is China Deflating?

Dec 16, 2024 3 min read paid

Last Thursday, we wrote, "After today's PPI, we won't be surprised if Fed officials plant a story in The Wall Street Journal over the weekend titled something like "Fed Officials Might Vote To Pause Rate Cutting Following Hot Inflation Data." We were close. Nick Timiraos, the WSJ's ace Fed watcher, posted after midnight today an article titled "The Fed’s

Ed Yardeni

Manufacturing Indicators May Be Rebounding in US and China

Dec 2, 2024 2 min read paid

After languishing for the past couple years, manufacturing gauges in both the US and China improved in November. Could this be the start of a rolling recovery for both countries' goods producers? We think so, though a tariff war would spoil the party quickly. A revival in US goods production would likely boost bond yields as growth expectations increase. The 10-year Treasury yield could breach 4.5% by year-end

Ed Yardeni
Eric Wallerstein

China: A Deflating Dragon

Nov 11, 2024 3 min read paid

Over the past three years, most American economists believed that a recession would be necessary to bring inflation down to 2.0% in the US. While the US economy managed to avoid a downturn, those predictions may have been right. The recession, however, was in China as the huge negative wealth effect of falling property and stock prices caused Chinese consumers to retrench. China's government encouraged manufacturers to

Ed Yardeni
Eric Wallerstein

Geopolitical Hot Spots

Oct 15, 2024 3 min read paid

With the Fed in easing mode and US economic growth remaining resilient and even robust, we are still wondering what could possibly go wrong. We remain optimistic on the economic outlook and bullish on the outlook for stocks. We continue to monitor the geopolitical risks that might revive inflation and depress global growth. On Friday, JPMorgan Chase CEO Jamie Dimon said that these risks are "treacherous and getting worse.

Ed Yardeni
Eric Wallerstein

Larry & Ray’s Not-So Excellent Adventure in China is Over

Oct 8, 2024 3 min read paid

Both Blackrock's Larry Fink and Bridgewater's Ray Dalio have been notable and vocal China bulls for several years. It seems they've both joined our camp in recent days, issuing caution against investing in China as it supports Russia's war against Ukraine and becomes less favorable to capitalism. They should have placed their bets on stock markets in democracies such as the United

Ed Yardeni
Eric Wallerstein

Will China's Two Bazookas Shoot Silver Bullets?

Sep 30, 2024 2 min read paid

Over the past several days, China has unleashed several fiscal and monetary stimulus measures. China investor Jason Hu called these the "twin bazookas" policy of "[p]rint money and spend money." It's having an immediate effect, at least on stock prices. The Shanghai CSI 300 is up 27% since its low on September 17 (the day before the Fed's 50bps rate cut)

Ed Yardeni
Eric Wallerstein

Market Call: October Is Here. What Could Possibly Go Wrong?

Sep 29, 2024 3 min read paid

We asked the very same question at the start of September, and were hard pressed to come up with an answer. We concluded: "So perhaps, the path of least resistance will continue to drive stock prices higher. We are still expecting a yearend rally to 5800 on the S&P 500, but it could already be underway." The S&P 500 rose 1.6% during September

Ed Yardeni
Eric Wallerstein

Global Monetary Fire Hose To The Rescue!

Sep 24, 2024 3 min read paid

Chinese stocks rose 4.1% overnight thanks to the flurry of easing measures from its central bank (chart). The Peoples Bank of China lowered bank reserve requirements, cut interest rates, and will provide leverage to brokers to buy stocks. Propping up stocks with government funding sounds more like panic than proactivity to us. But the skinny of the matter is that the Fed's 50bps rate cut last week

Ed Yardeni
Eric Wallerstein

China Is The Source Of The Deflation Trade

Sep 10, 2024 2 min read paid

Forget about a recession in the US. Currently, it is China's recession/depression that is weighing on oil prices, global bond yields, and the dollar. Weak Chinese demand for oil caused OPEC today to trim the outlook for global oil demand, further depressing oil prices. Brent crude oil prices fell below $70 a barrel on Tuesday to their cheapest since December 2021 (chart). Declining oil prices dragged the

Ed Yardeni
Eric Wallerstein

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