Those stimulus were never aimed to pump #stocks as was (on purpose) misrepresented by western media sir 🥲👇🏻 https://t.co/0OKJ4IrzGJ
— JustDario 🏊♂️ (@DarioCpx) November 22, 2024
China is panicking:
Last week ALONE, China ETFs saw $2 billion of outflows, marking the largest weekly outflow in history.
Despite deploying pandemic-like stimulus, recent data suggests that China's economy is WORSENING.
Is China entering an economic depression?
(a thread)
— The Kobeissi Letter (@KobeissiLetter) November 22, 2024
China is panicking:
Last week ALONE, China ETFs saw $2 billion of outflows, marking the largest weekly outflow in history.
Despite deploying pandemic-like stimulus, recent data suggests that China's economy is WORSENING.
Is China entering an economic depression?
(a thread)
— The Kobeissi Letter (@KobeissiLetter) November 22, 2024
The whole world is about to go into Adani mode. pic.twitter.com/IRJgXaCyUg
— Mac10 (@SuburbanDrone) November 21, 2024
Last Thursday, a hotter than expected PPI combined with a hawkish Powell speech pounded the market lower into the end of the week.
Then Monday a rally ensued, but the S&P futures have tested key support Monday, Tuesday and Wednesday in a three wave correction. pic.twitter.com/sIWBESKIav
— Mac10 (@SuburbanDrone) November 21, 2024
“The dollar. It’s going up. Why?
Trump? Powell?…India?
Here’s what the evidence actually shows: pay attention to the rupee.
The US$ is a critical indicator of global risk. When it rises rapidly, that signals potential trouble in the global economy. Most people focus on euros or yen, for good reason, also pay close attention to India’s rupee and South Korea’s won.
Both are hitting new lows; the former record lows.
Rate cuts/hikes from the Fed don’t matter. Perfect example of what does, early 2001 Greenspan’s Fed cut five times by 50-bps each, there were tax cuts from Bush, the dollar didn’t plummet it actually soared because the dot-com recession was developing and it was global (and those govt measures never make a difference).
India’s rupee was right there in that, too, and has repeatedly been subjected to these risk-aversion (Euro$) cycles. One of the best indicators for global money dealer mechanics there is.
What you’ll see is the dollar increases even as interest rates fall sharply, both signaling heightened global risks. Lower rates higher demand for safety and liquidity so naturally the higher dollar is an additional risk premium to access money dealers.
The rupee tends to behave in a manner consistent with global economic cycles, often falling in value during times of economic stress and recovering when conditions improve. In more recent years, India’s boom has raised several local questions about how sustainable it might be (govt waste, deficits, plus a resurgent shadow banking problem). So, rupee is a reflection of those local risks in the global paradigm (how pressure from outside might create trouble inside).
Same for South Korea, where the won is similarly influenced by global economic conditions, especially those related to China. Won also correlates with increasing dollar risk premiums, South Korea’s economy being significantly impacted by developments within China. The risks tied to the euro-dollar system echo the challenges faced by India, suggesting that both countries confront potential setbacks as global economic pressures increase.
Rising dollar isn’t the Fed, it isn’t Trump, it is risk aversion and signaling. Two of the best and underappreciated, mostly overlooked are won and especially rupee.
More insights in EDU’s DDA which you can get a running sample of them in our free blog here:
https://www.eurodollar.university/edus-free-blog”
https://x.com/JeffSnider_EDU/status/1859932592310771864