Investors Say Policymakers Need To Paddle Their Dragon Boat Faster

Week in Review

• Asian equities were mostly lower this week as investors became skeptical that the AI-fueled tech stock rally so far this year has more room to run and largely believe that China’s year-to-date stimulus measures have not been enough.
• Alibaba announced key leadership changes following its restructuring into six separate businesses. Daniel Zhang will take over the cloud arm after stepping down as CEO, Eddie Wu will take over his position as CEO, and Joe Tsai will become Chairman of the holding company.
• The electric vehicle ecosystem received a boost this week with the extension of tax waivers for new energy vehicles until 2027.

Friday’s Key News

Asian equities closed out a lower week lower as global central bankers continue to hike interest rates leading to weakness in risk assets.

US stocks appear immune and/or unaware of non-US equity/risk asset weakness as Apple’s market cap is now larger than the combined market cap of the 717 companies in the MSCI China Index. The Asia Dollar Index and the offshore Renminbi (CNH) both weakened versus the US dollar overnight despite that fact that the US 10-Year Treasury yield is lower on the week. Overnight saw very light volumes in Hong Kong as Mainland China, which accounts for nearly 1/3 of Hong Kong’s daily volume via Southbound Stock Connect, was closed. The light volumes exacerbated a down day as many investors extended Thursday’s Dragon Boat holiday for a four-day weekend.