Hedge funds’ unabated appetite for Treasuries even amid red-hot US inflation signals a positive outlook for the securities. Investors based in Cayman Islands -- a popular domicile for hedge funds -- bought a net $75.9b of Treasury bonds in May, the most on official data going back to 2001. These funds had been mostly net buyers since November despite the skyrocketing cost of living stateside and aggressive Fed policy tightening. This suggests that hedge fund buying could rise even further once inflation shows signs of peaking and recession concern materializes.

함의: 헤지펀드들은 인플레이션 둔화와 경기침체 임박에 베팅하며 채권을 대량 매수함.

New Covid-19 cases in China jumped to almost 700, with more infectious strains of the virus continuing to test the country’s hardline approach as outbreaks spread beyond the major cities. China reported 699 cases for Monday -- the highest daily tally since May 22 -- after recording more than 1,000 infections over the weekend. Most of the cases are centered in the hotspots of the Guangxi region in the south, which recorded 243 cases on Monday -- taking its total since the outbreak there flared six days ago to 829 -- and the remote northwestern province of Gansu, which reported 231 new infections, taking the number of cases there in the past week to 953. 

함의: 중국 내 바이러스 감염자 증가 속도가 가팔라짐.

Mining giant BHP Group has joined rival Rio Tinto Group in signaling more turbulence to come for commodities producers as costs balloon and demand for everything from iron ore to copper hits headwinds. The world’s biggest miner warned Tuesday of an “overall slowing of global growth” amid war in Ukraine, Europe’s energy crisis and global monetary tightening. The commentary --  from its latest quarterly output update -- echoed remarks from Rio last week. BHP also said cost pressures would linger over the coming 12 months.

함의: 전세계 성장률 둔화로 인해 철광석부터 구리까지 모든 것이 역풍을 맞을 것으로 봄.

The French government offered to pay about 9.7 billion euros ($9.9 billion) fully nationalize Electricite de France SA as it seeks to resolve problems at the power generator that are exacerbating Europe’s energy crisis. The state will offer 12 euros a share to acquire the 16% of EDF it doesn’t already own, the French Finance Ministry said in a statement on Tuesday. That’s a premium of 53% to the closing value of 7.84 euros for EDF shares on July 5, the day before French Prime Minister Elisabeth Borne announced the nationalization. 

함의: 에너지 위기 극복을 위한 민간기업 국영화, 잔여지분 인수에 53% 프리미엄 지급 발표함.

After lagging for years, Europe's telecom sector is finally having its moment. The Stoxx 600 Telecom Index's 1% gain since the start of the year is not only beating the Stoxx 600's 14% drop, but also outstripping other defensive sectors including consumer staples and utilities. While the sector’s revenue growth is nothing to brag about — just 1% a year, according to Barclays — it offers predictable earnings and reliable dividends.

함의: 연간 1%대의 성장을 하지만 예상 가능한 범위에 있고 배당까지 지급하는 통신주가 연 초 이후 +1% 상승 해 비교지수는 -14% 하락과 큰 차이를 보임.

The European Central Bank may consider raising interest rates on Thursday by double the quarter-point it outlined just last month because of the worsening inflation backdrop, according to people familiar with the situation. Such a move would mark a sharp deviation from guidance that the majority of Governing Council members have stuck to since it was laid out at the June 9 policy meeting and would bring the ECB more in line with the global drive for outsized hikes.

함의: 6월 9일 이후 이어왔던 톤과 다르게 유럽중앙은행도 50bp 인상을 할 것 같음.

The long anticipated wave of global earnings downgrades looks like it may have begun, though for now at least it’s more of a ripple. Forward earnings estimates for the MSCI AC World Index have come down by over one percent from their early June high. Analysts still seem reluctant to take a knife to profit forecasts despite the threat of recession, something they had no qualms about doing with bottom-up price targets at the first sign of equity weakness this year.

함의: 실적 전망치 하향이 본격 시작될 것 같지만, 여전히 전망치에 칼을 대는 것을 망설이고 있음.

Chinese authorities are preparing to impose a fine of more than $1 billion on ride-hailing giant Didi Global, bringing an end to a yearlong investigation into the company's cybersecurity practices, according to people familiar with the issue. Once the penalty is announced, the government plans to ease an earlier restriction banning Didi from adding new users to its platform, and allow the Beijing-based technology company's mobile apps to be restored to domestic app stores, some of the people said. The fine will also pave the way for Didi, whose app is used by tens of millions of users in China each month, to kick-start a new share listing in Hong Kong, these people said. The Cyberspace Administration of China didn't immediately respond to written questions. The company didn't immediately reply to requests for comment.

함의: 벌금이 확정되면 많은 규제를 풀어주는 과정이 이어질 것이라 함.

There’s no doubt what Monday’s biggest market news was in New York. Apple Inc. stock fell more than 2% in its worst session in almost three weeks after Bloomberg revealed the company’s plans to slow hiring and spending to cope with a potential economic downturn. The news, shortly after midday, sparked an immediate tumble. Until now, shares of the iPhone-maker had fallen roughly 17% for the year, in step with the broader market rout. The announcement undercut the market, with other big “FANG” internet platforms such as Alphabet Inc. and Microsoft Corp. also falling. The tech stalwart had been among the companies that beat Wall Street expectations throughout the pandemic, and had come to be seen as a defensive stock, so any negative news was bound to hurt sentiment across the market. A “healthy correction” was in order, and what looks like some seriously unhealthy speculative excess has now been wrung out of the market. However, it’s worth noting that from the Great Financial Crisis through to about 2018, tech basically traded at the same multiple as the rest of the market. Tech’s premium could easily fall further from here.

함의: 애플의 소식에 기술주들이 순식간에 하락했던 월요일, 2008년에서 2018년까지 기술주는 시장지수 대비 밸류에이션 프리미엄이 없었단 사실을 알고 있는가?

The broad based risk-off sentiment that has dominated markets so far in 2022 has seen value stocks outperform growth stocks by quite a margin. That may be about to change though, as fears of a recession go truly mainstream.

함의: 경기침체 우려가 시장을 잠식하며 가치주 대비 성장주 상대성과가 뒤집힐 수 있는 기로에 위치함.

Over the past few years, President Xi Jinping has reined in China’s biggest tech companies, stamped out democracy in Hong Kong and locked down 26 million people in Shanghai to eliminate Covid cases. Yet he now faces a surprise challenge from middle-class homeowners who are watching their family wealth slip away with a sustained slide in the property market, which makes up a fifth of China’s economic activity. Some 70% of household wealth in China is tied up in property, far more than in the US, making it one of the most sensitive political issues for the Communist Party. For months Xi has stood firm in reining in over-leveraged Chinese developers, spurring a record wave of defaults that spooked global investors and brought at least 24 leading property companies to the brink of collapse. In the process, more than $80 billion has been wiped from its offshore bond market. But now ordinary Chinese people are publicly revolting, with rapidly escalating boycotts on mortgage payments spread across at least 301 projects in about 91 cities. These homeowners accuse developers of failing to deliver apartments they’ve already paid for: the value of mortgages that could be affected has swelled to an estimated 2 trillion yuan ($297 billion).

함의: 기술 기업 통제, 홍콩 탄압, 상해 봉쇄, 그리고 24개 부동산 기업을 파산 직전까지 몰아세운 절대권력자, 하지만 가계자산의 70% 가까운 비중의 부동산 문제로 91개 도시 301개 프로젝트 보이콧 때문에 공개적 반란을 맞이하고 있음.

Scarred by Shanghai’s chaotic lockdown under the Covid-Zero policy that has made China a global outlier, Hu is joining what investment migration consultancy Henley & Partners estimates is a cohort of 10,000 high-net-worth residents seeking to pull $48 billion from China this year — the second-largest predicted wealth and people outflow for a country after Russia. The big question now hanging over China’s rich is whether President Xi Jinping’s government will let them leave. Popular destinations include the US, Singapore, Australia, Canada and places in Europe. Some of these countries have made migration processes more strict, or pulled back on investor visa schemes. Places where investment requirements are relatively low —  such as Spain, Portugal or Ireland — could also become more popular, one private banker said.

함의: 중국 국적을 버리고 떠나는 거액 자산가들, 과연 이들을 내버려둘지에 대한 문제에 관심이 집중되고 있음.

"If you have knowledge, let others light their candles in it."

- Margaret Fuller