SignalPlus Macro Research Report (20240116): Market Calm
Yesterday, the U.S. market was closed, and the overall market was relatively calm. In Asia, despite weak bank loans in China leading to a further slowdown in social financing, and both CPI and PPI currently being in a deflationary range, the People's Bank of China unexpectedly kept the MLF rate unchanged this month, disappointing the market. The performance of the Chinese stock market continues to lag behind the global market.
Yesterday, the U.S. market was closed, and the overall market was relatively calm. In Asia, despite weak bank loans in China leading to a further slowdown in social financing, and both CPI and PPI currently in the deflationary zone, the People's Bank of China unexpectedly kept the MLF rate unchanged this month, disappointing the market. The performance of the Chinese stock market continues to lag behind the global market.
Speaking of deflation, according to Goldman Sachs, global core inflation has significantly slowed since 2022-2023, averaging around 2%. The market has not overlooked this, continuously increasing the pricing for interest rate cuts in 2024, forcing central banks into a position where they must implement easing policies. However, at the same time, global shipping costs have begun to soar due to the Red Sea conflict, and the correlation between crude oil and inflation remains near historical highs. Additionally, still strong corporate profits and retail sales may provide support for inflation, and the market is currently not fully prepared for a resurgence of inflation, which is something to keep in mind this year.
