Washington Post (May 28)
“Nearly everything Americans believe about the economy is wrong.” A recent poll revealed that dire “perceptions of the U.S. economy are often at odds with reality.” In fact, “the U.S. economy has been growing consistently for nearly two years, even after accounting for inflation” and is “exceeding growth expectations” across most benchmarks. “The U.S. economy has been outperforming other advanced economies. We’re also doing better than pre-pandemic forecasts had situated us by now, both in terms of gross domestic product and the number of jobs out there. This generally isn’t true elsewhere in the world.”
Tags: Benchmarks, Economy, Expectations, GDP, Growing, Inflation, Outperforming, Perceptions, Poll, Pre-pandemic, Reality, U.S., Wrong
New York Times (May 27)
“The United States, Europe and other wealthy nations are trying frantically to catch up” to China which, according to the IEA, “accounted for 85 percent of all clean-energy manufacturing investment in the world” in 2022. These nations are now “spending huge amounts on subsidizing homegrown companies while also seeking to block competing Chinese products.” They seem to be making “modest inroads” with China’s share of investment falling to 75% in 2023.
Tags: 2022, 2023, Catch up, China, Clean-energy, Competing, Europe, Homegrown, IEA, Inroads, Manufacturing investment, Subsidizing, U.S., Wealthy nations
Financial Times (May 27)
“What industry could replace” real estate “as the main driver of growth in China?” The automobile industry may look promising, but it’s a mere fraction of the size and creates other problems. China’s massive manufacturing sector already “exceeds domestic demand and expanding exports would encounter more trade friction with other countries.” Education and healthcare, on the other hand, have received insufficient spending. These areas would present the market with business opportunities and bring “substantial potential for growth” to the Chinese economy.
Tags: Automobile, China, Demand, Domestic, Education, Exports, Growth, Healthcare, Industry, Manufacturing, Real estate, Sector, Trade friction
Market Watch (May 25)
“On May 28, a new rule will go into effect that will affect almost every stock, bond, and ETF trade in U.S. markets,” requiring settlement within one day. Reducing failure to deliver (FTD) “risk is one of the reasons that industry players have been pushing to get to a T+1 settlement cycle since the 1990s, when the settlement cycle was still at T+5. Over the years, the U.S. has moved to a T+3 settlement cycle, then T+2 and now finally T+1.”
Tags: 1990s, Bond, Effect, ETF, Failure to deliver, May 28, Risk, Rule, Settlement cycle, Stock, T+1, T+2, T+3, T+5, Trade, U.S. markets
OilPrice.com (May 24)
De-Dollarization has begun. In China, the majority of cross-border payments had always been in dollars. “In March 2023, the share of the RMB in China’s settlements surpassed the USD for the first time.” In other transactions, the currency’s progress may be masked. For example, “the Bank for International Settlements reveals that, in 2022, the USD remained the most-used currency for FX settlements. The euro and the Japanese yen came in second and third, respectively.” However, “the Chinese renminbi, though accounting for a relatively small share of FX transactions, gained the most ground over the last decade. Meanwhile, the euro and the yen saw decreases in use.”
Tags: BIS, China, Cross-border payments, De-Dollarization, euro, FX, Japan, Renminbi, RMB, Settlements, Transactions, USD, Yen
Bloomberg (May 24)
“Overseas issuers sold yen bonds at the fastest pace in five years so far this month, chasing cheap funds before an expected interest rate hike by the Bank of Japan pushes up borrowing costs.”
Tags: BOJ, Borrowing costs, Cheap funds, Expected, Fastest pace, Hike, Interest rate, Overseas issuers, Yen bonds
WARC (May 24)
“Social media is now the largest channel worldwide by ad investment, having seized the crown from paid search…. Global social media ad spend is forecast to total $247.3bn in 2024, up 14.3% year on year, a slight deceleration from +16.0% in 2023. The growth is more pronounced in Western markets: growth across five leading Chinese social platforms (Duoyin, Weixin/QQ, Kuaishou, Weibo and Zhihu) analysed by WARC is set to reach only 4.6% next year.”
Tags: $247.3bn, 2024, Ad, Channel, Duoyin, Growth, Investment, Kuaishou, Paid search, Social media, Spend, Weibo, Weixin/QQ, Western market, Worldwide, Zhihu
The Economist (May 21)
“China’s leaders are trying to fix a problem that has dogged the country for decades: how to spread wealth more evenly.” So far the problem is intractable. Per capita GDP throughout the bulk of China (the west and north-east) “is 70,870 yuan ($9,800) and 60,400 yuan, respectively. Along the coast it is 124,800 yuan. China’s richest provincial-level unit, Beijing, is four times wealthier than its poorest, Gansu (see map). And the richest areas are pulling further ahead.”
Tags: Beijing, China, Coast, Disparity, GDP, Intractable, Leaders, Poorest, Problem, Richest, Wealth, Wealthier
Wall Street Journal (May 21)
“Computer science is hotter than ever at U.S. universities. But students graduating this month are discovering their degrees are no longer a surefire ticket to tech-industry riches.” As tech giants slow expansion and embrace artificial intelligence, they “now have less need for entry-level hires—or are shedding jobs” so graduates “are finding it harder than they ever thought it would be to land a job.”
Tags: AI, Computer science, Entry-level hires, Expansion, Graduates, Students, Surefire, Tech industry, U.S., Universities
Forbes (May 19)
“The Biden administration said this week the U.S will quadruple tariffs on Chinese EVs in a move aimed at protecting American workers and businesses from unfair Chinese trade practices.” Some think this will provide a lifeline, but at least one auto industry executive believes “the increase won’t help the long-term staying power of the industry or its jobs.” Instead, the “capitulation to the status quo” will “condemn” the U.S. auto industry “to a slow but certain death” as the rest of the industry moves “toward technology that doesn’t rely on oil.”
Tags: Auto industry, Biden, Businesses, Capitulation, China, EVs, Lifeline, Protecting, Status quo, Staying power, Tariffs, Technology, Trade practices, U.S., Unfair, Workers
