Week in Review
- Earlier in the week, global CEOs, including Apple’s Tim Cook, were in attendance at the China Development Forum.
- On Tuesday, Alibaba announced it would become a holding company comprised of six business groups in order to “unlock shareholder value and foster market competitiveness.”
- On Wednesday, BYD and Kuaishou released their financial results for the quarter, beating analyst expectations across the board.
- On Thursday, Premier Li gave a keynote speech at the Boao Forum stating, “In the first two months of this year, the Chinese economy showed an encouraging momentum of rebound. The situation in March is even better than that in January and February.”
Friday’s Key News
Asian equities ended the week and quarter positively as India outperformed while the Philippines -2.18%. I’ll contact my main man in Manila, Brian, to find out what happened. In your mind, you’d think global stocks were crushed, but Asia, the US, and especially Europe (double-digit gains) had a shockingly strong 1st quarter. Yes, I’m knocking on wood, as there is no reward/upside performance without risk. Like many investors, the scary headlines and lack of confidence in the Fed are the main contributors. Personally, I’ve added to cash/money market funds markets which yield nearly 5%, so of course, stocks went up! The key is to look at the data and don’t act emotionally!
At the market’s open, we had the “official” PMIs released as Manufacturing PMI was 51.9 versus expectations of 51.6 and February’s 52.6, and Non-Manufacturing was 58.2 versus expectations of 55 and February’s 56.3. Remember PMIs track month-over-month changes, not year-over-year. The growth rate in manufacturing, geared to the global economy, slowed while domestic China’s growth increased. Manufacturing new export orders slowed month over month from 52.4 to 50, while non-Manufacturing new export orders declined into contraction mode from 51.9 to 48.1. Business expectations in both surveys are very high, with Manufacturing expectations 55.5 and Non-Manufacturing 63.3! Remember what Premier Li stated yesterday that things are picking? I would anticipate month over month; this positive momentum will increase.
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