With stocks at record highs, what’s priced in (or not)?

With stocks at record highs, what’s priced in (or not)?

With stocks trading at record highs, I’d argue that nothing is as important as what “news” is priced in–or not. If stocks have priced in all the likely good news, then there’s much less to drive prices higher–and much more expansive possibilities for drops on disappointments. If there’s likely good news that’s not yet priced in, then stocks have potential fuel to move high. And, on the other hand, if bad news is priced in and fails to materialize, then, hey, we’re going higher from here. And if bad news isn’t priced in, then current record prices aren’t sustainable.

China’s economy slows at unexpectedly high speed

China’s economy slows at unexpectedly high speed

Retail sales rose just 2.5% in August from a year earlier, China’s National Bureau of Statistics reported today. The estimate from economists surveyed by Bloomberg was for 7% year over year growth. Retail sales grew at an 8.5% pace in July. Industrial production was up 5.3% year over year, down from a 6.4% rate in July. Fixed asset investment grew by 8.9% in the first eight months of the year from the same period in 2020. Economists were looking for 9% growth. Construction investment contracted by 3.2% in t5he first eight months of 2021 from that period in 2020 as the government tightened controls on risky money accounts used to finance property development.

Adding MOO to the Perfect 5 ETF Portfolio

Adding MOO to the Perfect 5 ETF Portfolio

It’s tempting right now to say “To hell with diversification; let’s put everything into U.S. stocks. After all, they’re outperformed most asset classes for most of 2020 and for the year to date.” That’s exactly the kind of thinking, however, that gets an investor into trouble when an asset class is trading near a historic high. A time like this, like now, is exactly when you should be looking to make sure that you’ve got decent balance in your portfolio. And, to the degree you can, own stuff that will go up when other stuff goes down. Which is why I’m adding shares of the Van Eck Agribusiness ETF (MOO) to the Perfect 5 ETF Portfolio today

Trick or Trend: Will Wednesday’s data show China’s economy slowing in May from April torrid pace?

Trick or Trend: Will Wednesday’s data show China’s economy slowing in May from April torrid pace?

On Wednesday, June 16, China will release its official data on economic indicators such as industrial output and retail sales. The numbers are expected to show a slowing from April’s torrid growth but still a very healthy pace of improvement. Which would be a good thing since an over-heating Chinese economy would be one source of potential global inflation, and especially of commodity price inflation.

China’s exports, trade surplus surge

China’s exports jumped in November by the most since early 2018. That growth pushed the country’s trade surplus to a monthly record. Exports rose 21.1% war over year in dollar terms in November, the largest increase since February 2018. Imports grew by only 4.5%. That resulted in a trade surplus of $75.4 billion for the month. That was the  largest on record in data going back to at least 1990. Economists surveyed by Bloomberg had forecast that exports would increase by 12% while imports would grow by 7%.

China’s economy slows at unexpectedly high speed

China’s economy grows faster than expected in November

China’s official Purchasing Managers Index for Manufacturing rose to 52.1 in November. The was up from 51.4 in October. And beat the 51.5 median estimate from economists surveyed by Bloomberg. The index for the non-manufacturing sector climbed to 56.4 in November from 56.2 in October. That exceeded the median forecast of 56. The picture that emerges is of a Chinese economy that has stabilized in November and that has momentum generated by end of the year consumer spending and government measures to stimulate domestic consumer.