Click here for the PDF: The Weekly Beacon – July 7 2023
We will be giving some macro economic market updates on a weekly basis. No equity recommendations will be given in this commentary, and we encourage you to contact us if you have questions regarding any observations.
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This weeks issue: China vs. U.S., Trade war, Export restrictions, Germanium production, Gallium production, Rare Earth metals, Metal stocks, Metal production by country, Airline stocks, Air Canada, JETS ETF, Recession indicator, Record travel volume, Interest rates, Inflation, FED minutes, Market sentiment, Fear and greed monitor, Market melt-up, Chinese economy, Recessions, Chinese manufacturing.
Chinese recovery fading
The Chinese economic recovery that we have seen start this year is beginning to crack.
Activity in the services industry and construction sector dropped to its weakest level since December according to official data released on June 30th.
Following the weak numbers, the Chinese Yuan weakened. The Yuan has fallen 5% relative to the U.S. Dollar this year as investor sentiment soured on China as its growth prospects fell. Chinese interest rates are also well below many major economies’ interest rates across the world. Non-manufacturing PMI also retreated in the most recent data dump, showing a crack in the armour in China’s economic recovery.
*Remember China’s recovery lags much of the world due to their harsh and rigorous approach to containing Covid-19.*
The data to start the year reflected pent-up demand from consumers from China’s lockdowns, but that demand has not continued at all according to multiple Asian market strategists.
