3. Chinese Large Cap Looks Like It Will Break Below Covid Lows.
4. China Weighs Stock Market Rescue Package Backed by $278 Billion
China considers offshore money for stabilization fund: sources
Some policy measures could come as soon as this week
By Bloomberg News
Chinese authorities are considering a package of measures to stabilize the slumping stock market, according to people familiar with the matter, after earlier attempts to restore investor confidence fell short and prompted Premier Li Qiang to call for “forceful” steps.
Policymakers are seeking to mobilize about 2 trillion yuan ($278 billion), mainly from the offshore accounts of Chinese state-owned enterprises, as part of a stabilization fund to buy shares onshore through the Hong Kong exchange link, said the people, asking not to be identified discussing a private matter. They have also earmarked at least 300 billion yuan of local funds to invest in onshore shares through China Securities Finance Corp. or Central Huijin Investment Ltd., the people said.
10. Russia’s elite paratroopers and marines are refusing orders to launch ‘human wave attacks,’ Ukraine official says-Business Insider.
Marines march past an honor-guard soldier during a Naval parade rehearsal in St. Petersburg, Russia, in 2022. Nathan Rennolds
Elite Russian troops are refusing to launch “human-wave attacks,” a Ukrainian official said.
Nataliya Humenyuk said marines and paratroopers are concerned over huge losses in the assaults.
She said former prisoners and poorly trained reservists typically carry out costly frontal assaults.
Russian marines and paratroopers are refusing to launch certain types of assaults due to concerns over the huge losses other troops are suffering, a Ukrainian official said, the Kyiv Post reported.
Nataliya Humenyuk, a press secretary for the Armed Forces of Ukraine’s Joint Command South, said that the soldiers considered “themselves ‘elite troops'” and did not “want to go into frontal assaults” that former felons and reservists typically carry out, the outlet reported.
Throughout the Russian invasion, Russia has become increasingly reliant on high-risk frontal assaults involving waves of attacks that probe Ukrainian positions and seize small portions of territory at the cost of substantial casualties.
Humenyuk cited Russian attacks on Krynky in the Kherson Oblast in southern Ukraine, saying that Russian troops assaulting Ukrainian marine positions there were being hit with losses of more than 50%.
“At present in our sector the number of units of the type ‘Shtorm-Z’ [low-grade Russian units made of up older reservists and former felons, often committed to carry out human wave attacks] is falling and we are seeing more naval infantry and paratroopers,” Humenyuk said.
“But they consider themselves ‘elite troops,’ and they don’t want to go into frontal assaults like that,” she added.
One of Russia’s newly formed paratrooper units, the 104th Guards Airborne Division, appeared to be hit particularly hard in its combat debut in the Kherson region late last year, the UK Ministry of Defence said in an update on the conflict in December.
1. S&P New Highs….7th Longest Run Ever Between New Highs.
2. Earnings Recessions Set to End.
Nasdaq Dorsey Wright Earnings estimates see dip in Q4 2023 before positive growth throughout 2024 The last time we showed you the chart below, Q4 earnings growth was expected to be positive.
Now, though, it’s currently on track for earnings to dip almost 2% YoY (orange bar).
3. What Outperforms in the Years Following Rate Hikes?
Blackrock Despite their “risk asset” label, all stocks are not created equal. With inflation and economic uncertainty still high, we retain our focus on quality and lower-beta equities. Both have outperformed higher-risk counterparts in the years following the end of rate hikes, as shown below. While higher valuations, inflation and rates may mute overall stock market returns relative to the prior decade, we see attractive stock selection opportunities in 2024 amid a Fed pause and outlook for broadening market breadth.
4. China and Hong Kong Stocks Have Erased $6 Trillion Since 2021 Peak.
by Michael Batnick There was more speculation leading up to the launch of the Bitcoin ETF than anything that I’ve ever seen. People were debating how much money these ETFs would take in and what impact the inflows would have on the underlying price.
The nine new spot Bitcoin ETFs that came to market have collectively taken in just under $4 billion. (H/t Eric Balchunas on all this data)
IBIT (iShares) and FBTC (Fidelity) took 4 and 5 days respectively to get to $1 billion in assets. The only other ETFs to get there faster were BITO, the BTC futures ETF, which took 2 days, and GLD, which took 3 days.
The volume that these things are doing is arguably more impressive than the assets. Balchunas notes that:“For context, as a group the Nine’s $1.2b in daily volume puts them in Top 1% of all ETFs (w/ $GBTC as well). But even if you single them out, $FBTC & $IBIT each in Top 2%. Keep in mind the avg age of ETFs in Top 2% is prob like 14yrs old. So pretty wild to get there in a week.”
So the launch of these ETFs was a resounding success. Hard stop. The price of the underlying is more of a mixed bag. The ETFs are down ~10% since they started trading. But Bitcoin itself is up almost 40% over the last three months as anticipation of the launch grew stronger. It shouldn’t be terribly surprising that it didn’t go up in a straight line after the announcement of something that had been well-telegraphed. The market, every market, is pretty good about pricing stuff in. This is not to say I called this, I didn’t, but I’m not surprised either. https://theirrelevantinvestor.com/2024/01/21/how-big-can-bitcoin-get/
6. Number of Ships Thru Suez Canal Cut in Half.
Torsten Slok Apollo Normally, 200 ships travel through the Suez Canal from South to North over a week, but that number has recently declined to 100, see the first chart.For the Panama Canal, Northbound traffic has also declined 50%, from 90 ships per week to 45, see the second chart. The third chart shows that the price of transporting a container from Shanghai to Rotterdam has tripled. The bottom line is that higher transportation costs are putting upward pressure on goods inflation.
@Charlie Bilello Truflation, which attempts to calculate a real-time inflation rate in the US, is suggesting actual inflation is over a percentage point lower at 1.85%. A year ago this inflation gauge was above 6%.
10. Americans are Actually Pretty Happy with Their Finances.
1. A Record 91% of Fund Managers Expect Interest Rates to Go Lower
Marketwatch-As of this month, a record 91% of fund managers surveyed expect short-term interest rates will drop over the next 12 months, up from 87% in Dec. 2023. Those figures mark the highest levels of bullish sentiment on interest rates since BofA’s surveys first started two decades ago in 2001. By Louis Goss
2. U.S. Treasury Issuance is Set to Double in 2024 to $2 Trillion
Dave Lutz at Jones Trading Coming flood of US Treasury issuance unsettles some investors after blazing rally – While expectations for Fed easing may be driving bond prices now, some believe U.S. Treasury issuance, expected to nearly double to $2 trillion in 2024, could be a counterweight. Yields – which move inversely to bond prices – would have to rise from current levels to entice demand for the flood of new debt, they say. Such concerns helped drive Treasury prices to 16-year lows when they intensified in October. In a survey of investors by BofA Global Research, 23% said a bet on lower Treasury prices was their “highest conviction” trade for 2024, while 21% said the same for bets on higher Treasury prices.
3. 10-Year Treasury Yield Moved Back Above 4%
4. Earnings Reports Everyone Talking AI
From Jim Reid at Deutsche Bank
5. More Presidential Elections Seasonality Data.
Nasdaq Dorsey Wright
Based on average returns, the fourth year of a president’s term has historically been the second lowest for SPX and RUT. The best time for these domestic benchmarks has been the third year (which rang true in 2023).
During the fourth year, SPX and RUT have typically softened around the 60-trading day window (late March/early April) before reaccelerating into year-end around the 220th trading day (early November).
6. Since March 2022, U.S. developers have signed 57 supply agreements representing about 73 million metric tons of LNG annually
WSJ Russia’s invasion of Ukraine kicked U.S. exports into overdrive. Since March 2022, U.S. developers have signed 57 supply agreements representing about 73 million metric tons of LNG annually, according to S&P Global Commodity Insights—more than four times the number of contracts they signed between 2020 and 2021.
7. Uranium Spiking
8. Grayscale Bitcoin Trust (BTC) (GBTC) Sees Outflows of $579m
Emily Graffeo-(Bloomberg) — Investors have pulled over a half of a billion dollars from the Grayscale Bitcoin Trust during its first days of trading as an ETF.
The fund, which won US Securities and Exchange Commission approval to convert to an ETF from a trust last week, has seen outflows totaling about $579 million, according to data compiled by Bloomberg. It’s a stark difference from the other nine spot Bitcoin ETFs, which have pulled in a total of nearly $1.4 billion.
“Thanks to the ETF conversion this is the first time we’ve had clear sight into flows of GBTC,” said James Seyffart, an ETF analyst at Bloomberg Intelligence, who noted that investors may be profit-taking.
The flow data is a more complete look at how the ETF fared in the wake of SEC approval. While over $2.3 billion of GBTC shares changed hands its first day, the outflows now indicate that a portion of that volume was due to selling. “Grayscale has dominated the market for regulated Bitcoin investing for over a decade. Now that other issuers have come to market, we are naturally seeing some rotation into these new products,” said Zach Pandl, Grayscale’s managing director of research. “Total net inflows into Bitcoin investment products are what matters for prices, not substitution from one product to another.”
The outflows from Grayscale’s ETF aren’t entirely unexpected. Bloomberg Intelligence forecasted that the fund will drain over $1 billion over the coming weeks.
“Lots of this capital will find its way back into other Bitcoin exposures,” Seyffart said.
Some investors are fleeing to cheaper spot Bitcoin ETFs. With an expense ratio of 1.5%, GBTC is the most expensive US ETF that invests directly in Bitcoin. The second-most expensive fund, the VanEck Bitcoin Trust, charges 0.25%.
Empty-nest baby boomers own 28% of the nation’s large homes, while millennials with kids own just 14%.
Empty nesters take up a lot of large homes because affordability was better when they were young, and there’s no financial incentive to sell now: Most boomers own their homes free and clear, and most who have a mortgage have a low rate.
The landscape has transformed over the last decade: 10 years ago, young families were just as likely as empty nesters to own large homes.
Empty nesters take up at least 20% of large homes everywhere in the U.S.
Millennials with kids take up less than 18% of large homes no matter where they live. They own the biggest share in the Midwest and the smallest share in coastal California.
Our brain uses automatic thinking to streamline responses to stimuli.
Sometimes automatic thinking can be maladaptive, requiring an override.
We can correct for cognitive biases by working with our mental camera.
The predictive text function on my iPhone lately has been making an error. It reads the word “so” and assumes that I want to write “Sophie.” I’ve corrected it many times, but it sees “so” and stubbornly assumes that I am writing to or about my friend Sophie.
Our brain offers its own “predictive text” function when it makes assumptions based on our past experiences. Sometimes, this works very well. When we encounter a hot stove burner, for example, we don’t have to write a pros and cons list about whether we should place our hand there. Our brain quickly computes that a hot stove burner is dangerous and should not be touched. Thank you, automatic thinking!
However, just as with our iPhones, there are times when our brain’s attempts to shortcut do not serve us well. This post explores how certain types of automatic thinking can increase distress surrounding chronic illness.
When we exhibit attentional bias, we pay selective attention to specific information, failing to place that information in a broader context (Savioni & Triberti, 2020). Many people living with chronic illness experience a hyper-vigilance around symptoms. We are very attuned to our bodies, noticing every ache and pain. This makes sense, as our brain believes — and rightly so — that we need this information to keep ourselves safe. Attentional bias comes into play when our brain is so focused on identifying symptoms that it ignores or barely registers health.
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Take a moment to focus on a part of your body that is uncomfortable. What’s it like to zoom the camera of your mind’s eye on only that sensation? If your right hip hurts, for example, focus only on the pain you are experiencing in that area. Now zoom the camera out to include your whole body. Does your knee hurt? Your foot? What about the other side of your body? You’re still acknowledging that your right hip has pain, but your brain is now placing the pain in the larger context of your whole body. Pain is part of your experience when you zoom the camera out, not the whole of your experience. When you correct for attentional bias, you receive a different picture of what is happening.
Interpretation bias involves what we do with the information our brain has noticed (Savioni & Triberti, 2020). In chronic illness, there can be a tendency to interpret signals from the body as illness-related. There also can be a tendency to catastrophize.
As with attentional bias, this makes perfect sense. The brain knows that chronic illness symptoms often mean danger. Unfortunately, for many of us who live with chronic illness, the warning it provides sounds less like, “Just flagging these sensations for you. Do you think they are illness-related?” and more like, “RED ALERT! RED ALERT! THINGS ARE BAD AND THEY’RE ONLY GOING TO GET WORSE!”
Just as we did in addressing attentional bias, let’s pull the camera back. Observe the panic from a place outside of your big feelings. Speak gently to the panicked part of yourself, saying, “Boy, you’re really afraid. And it’s understandable. But you don’t have enough information to justify this high level of panic. Can you take a few breaths so we can evaluate what’s happening from a calmer place?” Treat yourself with respect and compassion. Once you’re able to calm yourself down, evaluate the symptoms you’re experiencing with a clearer head. Congratulations — you’re learning how to correct for interpretation bias.
Recall bias involves focusing on particularly painful moments in our past experiences (Savioni & Triberti, 2020). We may remember vividly the harrowing moments in our illness journey, without also remembering the times when our health was relatively stable. Especially when we experience a bodily sensation that causes concern, our minds immediately may flash to images of our darkest times.
By now, you know the drill: We’re going to do some camera work with our mind’s eye. Instead of staying with the image of your scariest moment, we’re going to play the film forward. Let’s imagine that experiencing symptoms causes you to remember yourself lying in a hospital bed. Time didn’t stop when you experienced that moment, so you are going to call to mind images of you rehabilitating and coming home from the hospital. Unfreeze the camera and look at the entire memory rather than only its worst parts.
Why Correcting Automatic Thoughts Matters
Correcting automatic thoughts about illness grounds us in a more balanced reality. Keeping our stress levels in check is mentally and physically healthy, benefitting our quality of life. Putting in the work to identify and correct automatic thoughts helps us to rewire our brains, updating problematic thought patterns to more adaptive ones.
1. Japan Stocks Beating China Stocks Since 2004 on Annualized Basis
2. Nvidia Forward P/E Lower than Semiconductor Index?
WSJ Nvidia currently trades about 26 times projected per-share earnings—near its lowest range in at least five years and well below its average of 40 times over that period, according to FactSet. Stacy Rasgon of Bernstein noted last week that Nvidia was also recently trading at a discount to the peer PHLX Semiconductor Index “for the first time in almost a decade, and is now (amazingly) the cheapest AI play, and likely already pricing in some prospect for an ‘air pocket’ scenario.”
3. Record Spread in P/E Ratios Between S&P vs. International Makes New Highs. Reversion to Mean for International has not Worked
Torsten Slok Apollo Comparing the P/E ratio of the S&P500 with the P/E ratio of the rest of the world shows a record difference, see chart below. In other words, US equities have never been more expensive relative to international equities
4. Crypto Trading Volume Post New ETFs
The Daily Shot Brief–Cryptocurrency: Trading volumes surged for US spot-bitcoin ETFs on Thursday.
8. Ecuador Conflict…Murder Rate Rise Leading into Current Drug War
Zerohedge Blog The following chart tries to capture a sense of where Ecuador sits within the context of its Latin American neighbors.
Venezuela’s homicide rate was the highest of the region in 2022 at 40.4 people killed per 100,000 inhabitants – that’s even with a fall of 20 percent since the 2019 figure, when it had been a rate of 50.6 per 100,000 people.
As indicated here, many of the countries in Latin America have seen decreases between 2019 and 2022, with Ecuador as an outlier for its 288% increase from 6.9 deaths per 100,000 inhabitants in 2019 up to 26.7 deaths per 100,000 in 2022.
The CDC notes that these illnesses – such as heart disease, cancer, and diabetes – are the nation’s leading causes of death and disability.
As for the unhealthiest state in America, West Virginia claims the No. 1 spot. The Mountain State, considered ground-zero for America’s opioid crisis, stands out with the highest drug overdose death rate in the U.S., according to the Forbes Advisor analysis. Lately, the use of fentanyl and the so-called “zombie drug” xylazine has fueled the state’s epidemic, NewsNation reported.
West Virginia also has the highest percentage of adults who smoke (21%), the highest percentage of adults who are obese (41%), and the second shortest life expectancy nationwide (73.9 years).
Mississippi, deemed the second unhealthiest state, has the shortest life expectancy at 73.63 years, the study found. The Magnolia State faces elevated rates of chronic diseases, including the highest cancer mortality rate in the country (17.37 deaths per 100,000 state residents).
The data also shows that Mississippi has higher rates of diabetes and hypertension, with 43.9% of adults in the state diagnosed with high blood pressure and 13.7% diagnosed with diabetes.
Aside from West Virginia and Mississippi, six other southern states are among the top 10 unhealthiest:
@Callum Thomas (Weekly S&P500 #ChartStorm)Bullish Consensus: The aptly named Consensus Inc conducts weekly surveys of futures market newsletters/brokerage reports and aggregates the percentage that is bullish. At this point their stock index series is the most bullish since 2018.
6. China Sold 5 Times as Many Cars to Russia Last Year Compared to 2022
WSJ While China has become acknowledged as a world leader in electric vehicles, traditional gas-powered autos were the main driver of the increase, with demand surging especially in Russia. Chinese carmakers seized the void left in the country by the departure of Western carmakers following the war in Ukraine, selling at least five times as many vehicles there last year than the 160,000 it sold in 2022, according to the China Passenger Car Association. By
The governors of New York and California are proposing new laws and funding to address retail theft in 2024.
Both governors, who represent the country’s largest Democratic strongholds, want stiffer penalties for retail crime offenses and increased police funding.
The announcements come as voters from both sides of the aisle point to crime as one of their biggest concerns ahead of the 2024 election.
The governors of New York and California announced sweeping plans to crack down on retail crime this week, as trade associations and police departments lobby for government action to curb theft.
The plans include new legislation designed to increase the penalties for retail crime offenses and more funding for police departments and district attorney’s offices to help them tackle theft.
Both Govs. Kathy Hochul of New York and Gavin Newsom of California, who represent the country’s largest Democratic strongholds, made preventing retail theft a top priority this year as voters from both sides of the aisle point to crime as one of their biggest concerns ahead of the 2024 election. The sheer fact that major “tough on crime” platforms are coming from Democratic governors of progressive states also threatens to upend decades of partisan political fault lines. In the modern era, Republicans have traditionally fought to stiffen criminal penalties, while Democrats have sought to address deeper causes of crime, like poverty, inequality and urban unemployment.
But not anymore. Since 2022, at least nine states — including six in 2023 — passed laws to impose harsher penalties for organized retail crime offenses, and New York and California could join that list. Retailers and trade associations around the country have worked to get the bills written and past the finish line.
It’s tough to determine whether theft offenses are up nationally, as it’s a crime that often goes unreported and undetected. It’s also unclear how effective the proposed legislation will be.
Experts previously told CNBC that laws that increase penalties for retail crime offenses may not actually reduce theft offenses, and could disproportionately harm marginalized groups. Similar strategies implemented to address the drug trade have done little to reduce the use or availability of illegal narcotics. Similar to low-level drug dealers, many serial thieves face mental illness, poverty or drug addiction, law enforcement agents previously told CNBC.
Hochul in her State of the State address Tuesday said she is planning to introduce bills that would create criminal penalties for online marketplaces and third-party sellers that contribute to the sale of stolen goods. She also aims to work with the legislature to strengthen penalties for those who assault retail employees.
In addition, Hochul plans to set up two new task forces dedicated to tackling theft – one for building cases against organized retail theft rings and another that addresses so-called smash-and-grab robberies.
As part of the initiatives, Hochul called for expanded funding for state police departments and district attorney’s offices to better equip them to tackle retail theft and other property crimes like burglary. She also wants to establish a tax credit for business owners who implement store security measures to help them offset those costs.
“Across our nation and our state, retail theft has surged, creating fear among customers and workers. Thieves brazenly tear items off shelves and menace employees. Owners go broke replacing broken windows and stolen goods, driving many out of business,” Hochul said in her address.
“These attacks are nothing less than a breakdown in the social order. I say: no more. The chaos must end.”
Newsom said on Wednesday that California will invest $1.1 billion over the next four years to address “safety and security” – $373.5 million of which will be dedicated to combating organized retail theft, according to his office.
In his state budget address, Newsom said 52 sheriff’s and police departments have already received upward of $250 million in new grants to combat retail theft. He added district attorney’s offices are receiving assistance to advance prosecution efforts.
“We mean business in this space,” Newsom said.
Newsom this week also called for new legislation that would address organized retail crime. He wants to target in particular people who are accused of repeatedly stealing from the same stores and “professional thieves” who resell stolen goods.
The proposals include new penalties that target people who engage in retail theft, including by increasing felony penalties and prison time, and bolstering existing laws so police can arrest theft suspects even if they didn’t witness the crime as it was happening.
Newsom is also calling for changes to the state penal code that would allow police to aggregate theft incidents within a given time period so it’s easier to charge repeat offenders with grand theft and other felonies. Currently, someone has to steal more than $950 in goods in a single incident to be charged with grand theft in California.
Farnam Street Blog A different take on what makes us feel so busy, stressed, and anxious.
As a rule, the larger your surface area, the more energy you have to expend maintaining it. Of course, when most of us think of surface area, we think of the area of a rectangle or how much grass we have to mow. But there is a surface area of life, and most of us never realize how much it consumes.
If you have one house, you have a relatively small surface area to maintain (depending on the age and size of the house, of course). If you buy another one, your surface area expands. But it doesn’t expand linearly – it expands slightly above that. It’s all the same work plus more.
Friends are another type of surface area. You have a finite amount of time to spend with friends before you die. The more friends you have, the less time you can spend with each one individually.
Money is another form of surface area. The more money you have, the more you have to keep track of different types of assets and investments.
When your surface area expands too much, you hire people to help you scale. Assistants, property managers, family offices, etc. They’re scaling you – but they’re also scaling the surface area of responsibility. This, of course, only masks the rapidly expanding surface area by abstracting it.
Beliefs are another type of surface area.
The thing about surface area is that the more you have, the more you have to defend and maintain. The larger your surface area, the more you are burdened with mentally and physically.
If you think in terms of surface area, it’s easy to see why we are so anxious, stressed, and constantly behind.
We feel like we need more time, but what we’re craving is more focus. What we need is a smaller surface area.
Your surface area becomes part of your identity. She’s the ‘busy person’ with her hand in every project. He’s the guy with four houses.
Competition can drive expansion. Most people want a bigger house to compete with someone else who has a nicer house. We are animals, after all. On a group level, this causes great benefits. On an individual level, it can cause unhappiness.
Most of the really happy people I know have a relatively small surface area. I know billionaires with two houses. Most of my close friends only have 4-5 close friends – everyone else is a friend in the loose sense of the word. Most of the productive people I know at work are focused on one or two things, not 5.
The way to maximize your enjoyment in life is to keep your surface area small. It’s a lot of work but if the happiest people I know are any indication, it’s a lot less work to keep it small than to maintain it when it’s large. https://fs.blog