Good morning 🇭🇰 Hong Kong - so the Fed cut rates by -50bps (bold move) & markets meltdown happened anyway.
Why? Because investors are like, wow 😮 JPO is so worried & cutting so much in an emergency cut then maybe I should worry about earnings.
Buy the rumors, sell the facts👈🏻
Why? Because investors are like, wow 😮 JPO is so worried & cutting so much in an emergency cut then maybe I should worry about earnings.
Buy the rumors, sell the facts👈🏻
Of course, the president is throwing the Fed under the bus even with a massive cut & he is clearly worried too that the expectations of worse earnings will feed through the economy + people’s fear of the virus’ll keep them from consuming & driving growth.
Fear is back today 👈🏻🙈
Fear is back today 👈🏻🙈
BOK holds emergency meeting with senior officials.
Should have cut. Now they have to do emergency cuts.
Should have cut. Now they have to do emergency cuts.
Asian PMIs horrible: Hong Kong Feb FMI was so bad it fell to 33.1 (retail sales is gonna be bad in Feb) Look at the contraction in Singapore. 
SCMP: Hongkongers selling their homes at huge losses to flee the city.
Wait until the summer. The exodus will be felt rather visibly.
Wait until the summer. The exodus will be felt rather visibly.
China composite Caixin PMI falls to 27.5 from 51.9 & services fell to 26.5 from 51.8 (estimate was 48).
Similar to state PMIs, services way worse.
BOTH ENGINES SPUTTERING!
Similar to state PMIs, services way worse.
BOTH ENGINES SPUTTERING!
Worst PMIs ever - note that services never felt this hard.
During GFC, services were still expanding. Here we got free falling of both services & manufacturing.
During GFC, services were still expanding. Here we got free falling of both services & manufacturing.
BOK is likely to cut today - the Fed -50bps likely spooked them & also this worst than ever China PMIs (key is that services dropping so hard & so if supply resumes we got a demand problem).
Not to mention the fact that Korea got domestic demand issues now.
Not to mention the fact that Korea got domestic demand issues now.
Remember, this virus is doing something that is key to economic growth: it infects LABOR/PEOPLE.
Without people to work, to spend, to take risk, we have free-falling of activities. That is an I-shape not V-shape.
👇🏻👇🏻👇🏻
Without people to work, to spend, to take risk, we have free-falling of activities. That is an I-shape not V-shape.
👇🏻👇🏻👇🏻
Details from the release (which u should already know if u follow me):
a) DEMAND shocks large (limited appetite for services)
b) SUPPLY shocks large (few workers)
And the future? Confidence LOW. And also, remember, services can't recover cash-flow losses.👈🏻👈🏻👈🏻
a) DEMAND shocks large (limited appetite for services)
b) SUPPLY shocks large (few workers)
And the future? Confidence LOW. And also, remember, services can't recover cash-flow losses.👈🏻👈🏻👈🏻
You can see the interview I did on Bloomberg on Monday here on how to think about the impact of the virus & whether rate cuts help (they do but only at the margin):
