Good morning! Equities not divorced from earnings (don't say I did not warn u!!!) Even just the supply chain impact from China alone is already massive let alone the demand side of things. Btw, SPX price to earnings ratio was 24 three days ago & today 19.6!
Not a rounding error.
Not a rounding error.
Let me say this in a different way, u may rally gradually over time to get to the peak but on the way down, the FOMO trade reverse VIOLENTLY b/c everyone trying to exit at the same time.
Look at performance ytd of equities. 3 days to take us to -7.8%. 3 days...
Look at performance ytd of equities. 3 days to take us to -7.8%. 3 days...
Nikkei -3% today taking it to double digits loss year-to-date. Note that Japan (and South Korea) likely to be the most impacted by this b/c they are very globally exposed (investment in mainland China + investment in Southeast Asia + now onshore shocks).
But what about China?
But what about China?
SCHOMP - mostly industrials, banks & real estate - has a PE of 14.4 (Hang Seng Chinese Enterprise 8.5)
W/ 1 month of the econ under essentially lock-down & normalization at best 70% of labor force & firms paying more for labor & 30% SMEs open (60% of GDP):
What about earnings?
W/ 1 month of the econ under essentially lock-down & normalization at best 70% of labor force & firms paying more for labor & 30% SMEs open (60% of GDP):
What about earnings?
I leave this here as rather busy Friday. But for those that participate in markets & trying to make sense of macro, don't forget that volatility is your friend.
If u have a conviction (to buy/sell), vol is great b/c of the manic buy & panic sell presents some mispricing opps🤗!
If u have a conviction (to buy/sell), vol is great b/c of the manic buy & panic sell presents some mispricing opps🤗!
1 day move in markets today - red everywhere.
Equities not divorced from earnings 👇🏻👇🏻👇🏻
Equities not divorced from earnings 👇🏻👇🏻👇🏻
Asian equities not divorced from earnings, including China👇🏻👇🏻👇🏻
@Trinhnomics will be on Bloomberg at 10am HKT Monday to discuss the impact of the corona virus (key data coming out next wk such as Korea final GDP, China PMIs, HK retail sales) on Asian economic growth with a huge emphasis on SUPPLY CHAIN DISRUPTION. I'll discuss pinned☝️🏻thread.
