Comparing the 2 charts, we can see that the Chinese Market has break out nicely from its bearish trend for several weeks while the US market has not.
We have less than 3 weeks to go before the end of 2022 and the FED has important role to play. First the interest rate - are they going to hike further or starts to trim it down ? If recession is to hit the US market, what will the government do ?
Unlike US, China has been printing money for quite some time, understanding how the zero Covid policy has impacted its economic growth for the last few years. We also see how the central government has relaxed some rules for the Property markets resulting in some counters rallying aggressively of late. Now, we are awaiting for more Covid-19 restrictions to be relaxed as the CNY 2023 is just round the corner. This is a major festive event and the government is fully aware of that.
With the Tech industry in US suffering major retrenchment , I forsee this will spread to the non-tech industry pretty fast as well. Probaby, by Q1 or Q2 next year. Then, what will President Joe Biden do ? He is coming to his 3rd term and this is a crucial year for him so I think he will urge the FED to then reverse course and starts to lower the interest rates (again ) albeit coming up with different reasons.
Then, to sustain the votes and make people happy, he will have no choice but to employ more QE tactics. Pumping money to banks and helping companies tide over this period will be key and be seen as lending support to the people in crucial time.
When that happens, the market will again go into a frenzy state just like 2008 and starts another multi year bull run.
What do you think ?
We have less than 3 weeks to go before the end of 2022 and the FED has important role to play. First the interest rate - are they going to hike further or starts to trim it down ? If recession is to hit the US market, what will the government do ?
Unlike US, China has been printing money for quite some time, understanding how the zero Covid policy has impacted its economic growth for the last few years. We also see how the central government has relaxed some rules for the Property markets resulting in some counters rallying aggressively of late. Now, we are awaiting for more Covid-19 restrictions to be relaxed as the CNY 2023 is just round the corner. This is a major festive event and the government is fully aware of that.
With the Tech industry in US suffering major retrenchment , I forsee this will spread to the non-tech industry pretty fast as well. Probaby, by Q1 or Q2 next year. Then, what will President Joe Biden do ? He is coming to his 3rd term and this is a crucial year for him so I think he will urge the FED to then reverse course and starts to lower the interest rates (again ) albeit coming up with different reasons.
Then, to sustain the votes and make people happy, he will have no choice but to employ more QE tactics. Pumping money to banks and helping companies tide over this period will be key and be seen as lending support to the people in crucial time.
When that happens, the market will again go into a frenzy state just like 2008 and starts another multi year bull run.
What do you think ?
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