The final quarter is often one of instant reinforcement of both winners and losers. How will it go this time, once the Fed has thrown the knucklebones? Will Evergrande’s partly politically-inspired demise be smoothly handled – if only in a manner that satisfies Xi’s insatiable lust for power? Will the Vaccine Wars further undermine social harmony and hinder economic progress? How will the burgeoning energy crisis – bastard child of misguided climate polcies – play out as winter approaches? All will be revealed in due course.
The sell-off in Treasuries is causing a few conniptions and simultaneously provoking a spate of bearish comments. The higher the markets go without some sort of correction or consolidation, the riskier they get, but we don’t think bonds, per se, are yet enough to trigger a reversal
As is by now widely reported, China stocks have been on something of a tear in the past few weeks, with the CSI300, for example, up by around 20% in that time. The usual suspects have been at work as the PBOC has encouraged a renewed money flood into being and those desperate for an income – and possibly with little else to do, at present – are enticed back into what is merely the latest in the nation’s rolling series of mania and speculative booms.