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Monday, December 23, 2024

Faltering Friday – Market Tries to Reconcile Election, Fed, White House Turmoil

Image result for china cyber crime cartoonAll kinds of stuff is happening.

At the moment (7:30) the futures are down a bit but not very much and we're still holding those huge gains from Wednesday – so all is well (ish).  There's new tensions with China as the NSA says Chinese Internet stocks are violating a 2015 Cybersecurity Agreement regarding intellectual property theft and that's a charge that should, techincally lead to even more sanctions against China.  Most likely, this is one of Trump's "negotiating tools" as he prepares for trade talks with Xi – another chip he has to bargain with.

Still, real or fake, these accusations are having very real effects on Chinese cyber-stocks, which are all heading lower pre-market, including AliBaba (BABA) who we would like to play bullish into their "Singles Day" on Sunday, but now we'll have to wait and see how the morning plays out.  Don't forget, Trump's unilateral sanctions are illegal unless he can cite "National Security Issues" and, if those don't exist – just make them up!  

Image result for trump no collusion cartoonWe're going to chalk up the timing of these charges, right before BABA's "Singles Day" and the fact that BABA's Jack Ma is critical of Trump's trade policies to be just another coincidence in Trumpland – where there's never any collusion – just many, Many, MANY coincidences…

China is, in fact, holding a massive International Import Expo this week and all of their Global Trading Partners are there – except us.  Our decision not to trade with the World's second-largest economy has opened up China to the rest of the World, who are thrilled to rush in and fill the voil – much like other countries rushed in to fill the voild of OPEC's cutbacks – and now oil is collapsing, down below $60 just a year after OPEC cut production.  Feel free to draw your own parallels…

Getting back to China, according to Bloomberg, there are 50M (22%) EMPTY Chinese homes, mostly homes that have been bought solely for speculation but the problem with that is, in a down market, those homes could flood the market into no demand and crash housing prices for everybody – taking the banks down with them.  

“There’s no other single country with such a high vacancy rate,” said Gan, of Chengdu’s Southwestern University of Finance and Economics. “Should any crack emerge in the property market, the homes to be offloaded will hit China like a flood.”

 

 

Short article due to poor internet – sorry!

 

 

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