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💥 China’s Economic Stimulus Sparks Rally, But Strike May cause Drop (Weekly Cheat Sheet)
| From | Irving Wilkinson <[email protected]> |
| Subject | 💥 China’s Economic Stimulus Sparks Rally, But Strike May cause Drop (Weekly Cheat Sheet) |
| Date | September 30, 2024 4:04 PM |
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Good afternoon,
What a week it’s been! China took center stage, rolling out a series of measures to boost its economy. The People’s Bank of China cut several key rates, and we saw a flood of fiscal spending announcements. This sent Chinese equities soaring, with the Shanghai Composite and Hong Kong’s Hang Seng both jumping 13% for the week.
Over in the U.S., we saw some interesting developments too. The key Fed inflation gauge, PCE, dropped to 2.2% in August – the lowest since 2021. This has sparked hopes for future rate cuts, with the fed funds futures market now pointing to a 54.8% chance of another 50-basis point cut in November.
View image: ([link removed])
Caption:
View image: ([link removed])
Caption:
In the tech world, **Micron** beat quarterly expectations and issued strong guidance, giving semiconductor stocks a nice boost. The **PHLX Semiconductor Index** ended the week up 4.3%.
Have a great week!
Irving Wilkinson, Editor
[AlphaBetaStock.com]([link removed])
----------
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----------
## Week In Review
--------------------
## **Looming East Coast Dock Strike Threatens to Disrupt U.S. Economy and Global Trade**
As the clock ticks down to a potential massive dock worker strike along the U.S. East Coast and Gulf ports, markets brace for significant disruptions that could ripple through the global economy. The International Longshoremen’s Association (ILA), representing approximately 45,000 dockworkers, is set to walk off the job on Tuesday, October 1, 2024, barring a last-minute agreement with port management.
### **Economic Stakes Higher Than Ever**
The potential strike, which would be the first of its kind on the East Coast since 1977, threatens to paralyze operations at 14 major ports from Maine to Texas. Economic analysts project daily losses to the U.S. economy ranging from $3 billion to $4 billion, with weekly GDP reductions estimated between $4.5 billion and $7.5 billion.”This is not just a local issue; it’s a national economic crisis in the making,” says Dr. Emily Chen, chief economist at Global Trade Insights. “The ripple effects could touch every sector of the economy and even influence monetary policy decisions.”
### **Markets on Edge**
Wall Street is closely monitoring the situation, with several sectors poised for significant impacts:
1. **Shipping and Logistics**: Paradoxically, some shipping stocks may see gains. ZIM Integrated Shipping Services and A.P. Moeller-Maersk have already seen upticks in their stock prices as investors anticipate tighter market conditions and potential rate hikes.
2. **Retail**: With the holiday shopping season on the horizon, major retailers are scrambling to mitigate potential inventory shortages. “We’re looking at a potential perfect storm for retailers,” warns Sarah Johnson, retail analyst at MarketWatch Advisors. “Supply chain disruptions coupled with potential price increases could severely impact holiday sales forecasts.”
3. **Agriculture**: The U.S. agricultural sector stands to lose big, with an estimated $318 million in weekly containerized agricultural exports at risk. “This couldn’t come at a worse time for farmers,” says John Deere, spokesperson for the American Farm Bureau Federation. “We’re talking about significant losses in poultry, soybean, and cotton exports.”
4. **Automotive**: European automakers are particularly vulnerable, as the strike threatens to choke off the flow of imported vehicles and parts. BMW and Mercedes-Benz have already announced contingency plans to reroute shipments through Canadian ports.
### **Inflation Concerns Resurface**
The Federal Reserve is closely monitoring the situation, concerned that widespread supply chain disruptions could reignite inflationary pressures just as they seemed to be cooling. “If this strike persists, we could see a significant uptick in consumer prices across various categories,” notes Federal Reserve Governor Lisa Cook. “This may force us to reassess our monetary policy stance in the coming months.”
### **Race Against Time**
As the deadline approaches, both sides remain entrenched in their positions. The ILA is demanding better wages and job protections in the face of increasing automation, while port operators argue that such concessions would make U.S. ports less competitive globally.
## **US Market Highlights**
* The U.S. Department of Justice accused **Visa** of monopolizing debit payments, alleging it inflates prices by suppressing competition. Visa controls over 60% of U.S. debit transactions, which is no small potatoes.
* New home sales dropped 4.7% in August, but there’s a silver lining. Lower mortgage rates and declining prices could drive demand soon. The median house price fell 4.6% from a year ago to $420,600.
* Consumer confidence took a nosedive, falling 6.9 points in September. It’s the biggest drop in three years, with folks earning less than $50,000 feeling the most pain.
* In M&A news, **Blackstone** and **Vista** are set to acquire **Smartsheet** for a cool $8.4 billion. That’s a 41% premium on the share price – not too shabby!
## **Global Highlights**
China’s making waves again. They’re ramping up economic support with rate cuts, $70 billion in loans, and plans for a $142 billion capital injection into state banks. It’s like they’re throwing everything but the kitchen sink at their economic woes.Meanwhile, in Europe:
* The Eurozone economy is showing signs of strain. Private-sector activity is shrinking, and job cuts are on the rise. High borrowing costs and weakening demand are painting a challenging picture, especially in manufacturing.
* **HSBC** is betting on the European Central Bank to cut rates at every meeting from October to April. If they’re right, we could see the key deposit rate drop to 2.25% by next spring.
Across the pond, Canada’s GDP growth stalled in August, missing targets after July’s 0.2% rise. It’s got folks talking about deeper interest rate cuts to jumpstart growth.
--------------------
## Commodities & Crypto
----------View image: ([link removed])
Caption:
In the commodities world, it’s been a bit of a mixed bag:
**Oil** prices are under pressure despite China’s economic initiatives. Brent crude oil has fallen back close to the $70 mark, shedding around 4.30% in five days.
View image: ([link removed])
Caption:
**Industrial metals** are having a party, benefiting from China’s stimulus announcements. Copper rose sharply in London, back above $10,000 a tonne.
**Gold** continued its rally to $2,660, setting new record highs. As they say, all that glitters is not gold – but in this case, it just might be!
View image: ([link removed])
Caption:
In the crypto sphere, **Bitcoin** is on a tear, topping the $65,000 mark. It’s now just 12% shy of its all-time high. Bitcoin Spot ETFs have seen over $600 million in net inflows this week. **Ethereum**, **Solana**, and **Binance Coin** are also riding the wave.
----------
## Calendar
----------As mentioned above, the potential strike could cause a lot of issues. Looking ahead, this week’s going to be a doozy:
* The U.S. jobs report for September drops on Friday. Economists expect 140K job additions and for the unemployment rate to hold steady at 4.2%.
* Earnings season kicks off with some big names. **Nike** reports on October 1, followed by **Carnival**, **Levi Strauss**, and **Constellation Brands** later in the week.
* Keep an eye on those China-focused stocks I mentioned earlier. After this week’s rally, next week could be interesting.
That’s all for this week, folks. Remember, in investing, as in life, it’s not about predicting the future – it’s about preparing for it. Stay curious, stay diversified, and most importantly, stay invested. Until next time, this is Irving Wilkinson, signing off.
———————————————————————————
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[link removed]
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Caption:
Good afternoon,
What a week it’s been! China took center stage, rolling out a series of measures to boost its economy. The People’s Bank of China cut several key rates, and we saw a flood of fiscal spending announcements. This sent Chinese equities soaring, with the Shanghai Composite and Hong Kong’s Hang Seng both jumping 13% for the week.
Over in the U.S., we saw some interesting developments too. The key Fed inflation gauge, PCE, dropped to 2.2% in August – the lowest since 2021. This has sparked hopes for future rate cuts, with the fed funds futures market now pointing to a 54.8% chance of another 50-basis point cut in November.
View image: ([link removed])
Caption:
View image: ([link removed])
Caption:
In the tech world, **Micron** beat quarterly expectations and issued strong guidance, giving semiconductor stocks a nice boost. The **PHLX Semiconductor Index** ended the week up 4.3%.
Have a great week!
Irving Wilkinson, Editor
[AlphaBetaStock.com]([link removed])
----------
## **Advertisement**
----------### Whiskey: The Tangible Asset for Your Portfolio
View image: ([link removed])
Follow image link: ([link removed])
Caption:
Most people fail to diversify their investments.
They invest all their money in intangible assets like stocks, bonds, and crypto.
The solution - fine whiskey.
Whiskey is a tangible asset, providing a unique appeal compared to other investments. Casks of whiskey have measurable attributes like size, age, and weight, making their value indisputable. This physical nature allows for clear identification of issues and adjustments to safeguard future value.
[Vinovest’s]([link removed]) expertise in managing these tangible assets ensures your whiskey casks are stored and insured to the highest standards, enhancing their worth over time. Discover how this tangible, appreciating asset can enhance your investment portfolio.
[Schedule a call with a Vinovest advisor to learn more.]([link removed])
----------
## Week In Review
--------------------
## **Looming East Coast Dock Strike Threatens to Disrupt U.S. Economy and Global Trade**
As the clock ticks down to a potential massive dock worker strike along the U.S. East Coast and Gulf ports, markets brace for significant disruptions that could ripple through the global economy. The International Longshoremen’s Association (ILA), representing approximately 45,000 dockworkers, is set to walk off the job on Tuesday, October 1, 2024, barring a last-minute agreement with port management.
### **Economic Stakes Higher Than Ever**
The potential strike, which would be the first of its kind on the East Coast since 1977, threatens to paralyze operations at 14 major ports from Maine to Texas. Economic analysts project daily losses to the U.S. economy ranging from $3 billion to $4 billion, with weekly GDP reductions estimated between $4.5 billion and $7.5 billion.”This is not just a local issue; it’s a national economic crisis in the making,” says Dr. Emily Chen, chief economist at Global Trade Insights. “The ripple effects could touch every sector of the economy and even influence monetary policy decisions.”
### **Markets on Edge**
Wall Street is closely monitoring the situation, with several sectors poised for significant impacts:
1. **Shipping and Logistics**: Paradoxically, some shipping stocks may see gains. ZIM Integrated Shipping Services and A.P. Moeller-Maersk have already seen upticks in their stock prices as investors anticipate tighter market conditions and potential rate hikes.
2. **Retail**: With the holiday shopping season on the horizon, major retailers are scrambling to mitigate potential inventory shortages. “We’re looking at a potential perfect storm for retailers,” warns Sarah Johnson, retail analyst at MarketWatch Advisors. “Supply chain disruptions coupled with potential price increases could severely impact holiday sales forecasts.”
3. **Agriculture**: The U.S. agricultural sector stands to lose big, with an estimated $318 million in weekly containerized agricultural exports at risk. “This couldn’t come at a worse time for farmers,” says John Deere, spokesperson for the American Farm Bureau Federation. “We’re talking about significant losses in poultry, soybean, and cotton exports.”
4. **Automotive**: European automakers are particularly vulnerable, as the strike threatens to choke off the flow of imported vehicles and parts. BMW and Mercedes-Benz have already announced contingency plans to reroute shipments through Canadian ports.
### **Inflation Concerns Resurface**
The Federal Reserve is closely monitoring the situation, concerned that widespread supply chain disruptions could reignite inflationary pressures just as they seemed to be cooling. “If this strike persists, we could see a significant uptick in consumer prices across various categories,” notes Federal Reserve Governor Lisa Cook. “This may force us to reassess our monetary policy stance in the coming months.”
### **Race Against Time**
As the deadline approaches, both sides remain entrenched in their positions. The ILA is demanding better wages and job protections in the face of increasing automation, while port operators argue that such concessions would make U.S. ports less competitive globally.
## **US Market Highlights**
* The U.S. Department of Justice accused **Visa** of monopolizing debit payments, alleging it inflates prices by suppressing competition. Visa controls over 60% of U.S. debit transactions, which is no small potatoes.
* New home sales dropped 4.7% in August, but there’s a silver lining. Lower mortgage rates and declining prices could drive demand soon. The median house price fell 4.6% from a year ago to $420,600.
* Consumer confidence took a nosedive, falling 6.9 points in September. It’s the biggest drop in three years, with folks earning less than $50,000 feeling the most pain.
* In M&A news, **Blackstone** and **Vista** are set to acquire **Smartsheet** for a cool $8.4 billion. That’s a 41% premium on the share price – not too shabby!
## **Global Highlights**
China’s making waves again. They’re ramping up economic support with rate cuts, $70 billion in loans, and plans for a $142 billion capital injection into state banks. It’s like they’re throwing everything but the kitchen sink at their economic woes.Meanwhile, in Europe:
* The Eurozone economy is showing signs of strain. Private-sector activity is shrinking, and job cuts are on the rise. High borrowing costs and weakening demand are painting a challenging picture, especially in manufacturing.
* **HSBC** is betting on the European Central Bank to cut rates at every meeting from October to April. If they’re right, we could see the key deposit rate drop to 2.25% by next spring.
Across the pond, Canada’s GDP growth stalled in August, missing targets after July’s 0.2% rise. It’s got folks talking about deeper interest rate cuts to jumpstart growth.
--------------------
## Commodities & Crypto
----------View image: ([link removed])
Caption:
In the commodities world, it’s been a bit of a mixed bag:
**Oil** prices are under pressure despite China’s economic initiatives. Brent crude oil has fallen back close to the $70 mark, shedding around 4.30% in five days.
View image: ([link removed])
Caption:
**Industrial metals** are having a party, benefiting from China’s stimulus announcements. Copper rose sharply in London, back above $10,000 a tonne.
**Gold** continued its rally to $2,660, setting new record highs. As they say, all that glitters is not gold – but in this case, it just might be!
View image: ([link removed])
Caption:
In the crypto sphere, **Bitcoin** is on a tear, topping the $65,000 mark. It’s now just 12% shy of its all-time high. Bitcoin Spot ETFs have seen over $600 million in net inflows this week. **Ethereum**, **Solana**, and **Binance Coin** are also riding the wave.
----------
## Calendar
----------As mentioned above, the potential strike could cause a lot of issues. Looking ahead, this week’s going to be a doozy:
* The U.S. jobs report for September drops on Friday. Economists expect 140K job additions and for the unemployment rate to hold steady at 4.2%.
* Earnings season kicks off with some big names. **Nike** reports on October 1, followed by **Carnival**, **Levi Strauss**, and **Constellation Brands** later in the week.
* Keep an eye on those China-focused stocks I mentioned earlier. After this week’s rally, next week could be interesting.
That’s all for this week, folks. Remember, in investing, as in life, it’s not about predicting the future – it’s about preparing for it. Stay curious, stay diversified, and most importantly, stay invested. Until next time, this is Irving Wilkinson, signing off.
———————————————————————————
Share AlphaBetaStock.com Market Cheat Sheet
You currently have <strong>0</strong> referrals.
Or copy and paste this link to others: [link removed]
———————————————————————————
Copyright © 2023 [AlphaBetaStock.com]([link removed]) All Rights Reserved | [AlphaBetaStock.com]([link removed]) is a financial news publisher that does not offer any personal financial advice or advocate the sale or purchasing of any investment/security. Please contact us for any errors in stories by [clicking here]([link removed]). For more information, please read our full [disclaimer.]([link removed])
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