Stansberry Research

Tuesday Morning Market Headlines

C. Scott GarlissStansberry NewsWire

Five Stories Moving the Market:

China’s economic growth fell to near-historic lows as COVID took a bite – WSJ. China’s economy grew at one of its slowest rates in decades last year as repeated lockdowns hammered households and businesses, emphasizing the high cost of zero-tolerance Covid-19 policies that Beijing abruptly abandoned at the end of 2022.

BOE’s Bailey says Truss risk premium on U.K. assets is ‘gone’ – Bloomberg. Bank of England Governor Andrew Bailey said the risk premium on UK assets since September is “pretty much gone” but that confidence remains fragile.

Yellen to meet with Chinese finance minister in Switzerland – POLITICO. Treasury Secretary Janet Yellen will meet with her Chinese counterpart, Vice Premier Liu He, in Switzerland on Wednesday to discuss economic developments between the two nations.

ECB’s Rehn says acting swiftly now can avoid ‘Volcker shock’ – Bloomberg. European Central Bank Governing Council member Olli Rehn said frontloading interest-rate increases to stem inflation may mean officials don’t have to take even more drastic action down the line.

Bright start to year for bonds eases market pressures - WSJ. Yields on U.S. Treasurys, which fall when bond prices rise, have plunged this year even more than they shot upward last January, at the start of what ultimately became the worst year for bonds on record.

Market Headlines:

Global Macro:

A measure of Australian consumer sentiment rose in January for the second straight month, as a break in a painful cycle of interest rate rises likely provided temporary relief for borrowers - Reuters.

China’s National Development and Reform Commission said it will tighten supervision of iron ore pricing, cracking down on illegal activities including spreading false information, hoarding and price gouging to keep the iron ore market stable, the agency said Sunday in a statement - Bloomberg.

China resumed on Sunday high-speed rail services between Hong Kong and the mainland for the first time since the beginning of the COVID-19 pandemic, as it dismantles travel curbs after Beijing scrapped quarantine for arrivals a week earlier - Reuters.

Russian President Vladimir Putin‘s use of energy as a weapon of financial war is increasingly backfiring, threatening the core of Russia’s beleaguered economy and curtailing its geopolitical influence - WSJ.

Fossil fuel production in China soared in 2022, with coal and gas hitting record highs, as environmental targets took a back seat to energy security after a tumultuous year for prices - Bloomberg.

Kyiv's infrastructure could collapse at any second as Russia's sporadic missile attacks along with freezing winter temperatures put local authorities under increasing strain, the Ukrainian capital's mayor said on Monday - Reuters.

Canadian home prices fell by the most on record in 2022, as rapidly rising interest rates forced a market adjustment that may have further to go - Bloomberg.

Secretary of State Antony Blinken will meet in Beijing with his counterpart, Chinese Foreign Minister Qin Gang, on February 5-6, according to Washington-based diplomats familiar with Blinken’s travel plans - POLITICO.

While the S&P 500 Index is down 17% from its record high set on January 3, 2022, about three-quarters of the stocks in the index are up 20% or more from their 52-week lows, while five mega-cap technology stocks — Apple, Amazon, Tesla, Microsoft, and Meta Platforms — are responsible for nearly half of the index’s losses - Bloomberg.

Wall Street's biggest banks stockpiled more rainy-day funds to prepare for a possible recession while showing caution about forecasting income growth in an uncertain economy and as higher rates increase competition for deposits - Reuters.

After pushing prices to new heights last year, some companies are starting to pull back, in what could be another sign that inflation is starting to turn a corner - WSJ.

U.S. and European airlines will benefit from pent-up demand for travel to China after its recent border reopening, but route approvals, fresh COVID-19 testing rules, and not enough large aircraft remain barriers to rising sales, analysts and industry officials say - Reuters.

Company Specific:

Activist investor Ryan Cohen has built a stake in Alibaba worth hundreds of millions of dollars and is privately pushing the Chinese e-commerce giant to accelerate and further boost its share-repurchase program, according to people familiar with the matter - WSJ.

Tesla vehicle owners feel ‘duped’ after the company dramatically cut prices on its cars on Thursday, part of a push from Chief Executive Officer Elon Musk to qualify some models for U.S. tax credits and increase sales volume in the face of weakening demand - Bloomberg.

Didi Global said it obtained approval from the Chinese cybersecurity regulator to resume new user registration for its ride-hailing service, the latest sign that Beijing’s clampdown on its internet giants is coming to an end - WSJ.