A worsening crisis in China’s real estate sector is dragging industry shares to the lowest in almost five months, with home sales slumping further and setbacks spreading at the nation’s most indebted developer. A Bloomberg Intelligence index of developer stocks dropped as much as 2.3% to the lowest level since March 16. Guangzhou R&F Properties Co. and Country Garden Holdings Co. led the declines, each losing at least 6%. The industry’s outlook turned darker after data showed home sales in the country extended a plunge amid a widening mortgage boycott, while China Evergrande Group failed to unveil a long-promised restructuring framework on time. Investor confidence also weakened on news of a plan mulled by authorities to seize distressed developers’ idle land to help complete stalled projects, a move that could cost creditors access to some of builders’ most valuable assets.

함의: 중국 경제에는 언제나 회색 코뿔소란 수식어가 함께했음.

With the busiest week of the second-quarter earnings season over, investors are relieved that results are holding up better than feared, according to Goldman Sachs Group Inc. strategists. Of the 56% of S&P 500 companies that have reported earnings so far, more than half have beaten analyst estimates -- above the long-term average of 47%, strategists led by David J. Kostin wrote in a note dated July 29. That, combined with “dovish messaging” from the Federal Reserve, has provided a boost to equities, they said. Still, at 52%, the rate of earnings beats is trailing the 62% average pace set in the last five quarters, Kostin said, suggesting that stocks are not out of the woods yet after posting their strongest monthly rally since November 2020. Although investors have been optimistic that corporate profits are proving resilient to the impact of scorching inflation and glum consumer sentiment, strategists are divided on the course for earnings estimates through the second half of the year -- and its impact on equities -- especially against the backdrop of a looming recession.

함의: 미국 기업 실적발표가 집중되었던 지난주 이후 집계 된 결과를 보면 투자자들 우려에 대비해 더 나은 실적을 보인 회사가 많았고, 이를 통해 인플레이션과 수요감소라는 우려스러운 환경에 기업들이 적응하고 있다는 기대를 불어넣음.

European factory activity plunged and Asian manufacturing output continued to weaken in July amid lingering supply-chain complications and a slowing global economy.
Purchasing managers’ indexes for the euro area’s four largest members all indicated contraction, with shrinking confirmed for the region as a whole after an initial estimate on July 22. In Asia, it was China, South Korea and Taiwan that took the biggest hit. The reports reflect the darkening outlook for the world economy that forced the International Monetary Fund to last week lower its global growth forecast for this year and next, warning an outright recession may be just around the corner.

함의: 유럽 4대 경제국의 제조업 지수가 위축국면에 접어들고 아시아에서 중국, 한국, 대만 또한 제조업에 타격을 입으면서 경기침체 그림자가 가까움을 경고한 IMF의 전망이 실재하고 있음.

Investors have lately become strangely optimistic that the Federal Reserve won’t have to tighten monetary policy much further, bidding up stocks and bonds amid hopes that the Federal Reserve will soon get inflation under control. This wishful thinking is both unfounded and counterproductive. The market’s exuberance appears to stem in part from Jerome Powell’s latest news conference, in which the Fed chair observed that growth had slowed, didn’t commit to another 75-basis-point rate increase in September and suggested that monetary tightening might curb excess demand for workers without doing too much harm to those currently employed. This has fueled speculation of a “pivot” to smaller interest-rate increases, with some even arguing that the Fed has done enough already. Don’t be confident about such an outcome. For one, Powell repeatedly referred to Fed officials’ projections from June, which show the federal funds rate reaching 3.8% in 2023 — more than 50 basis points higher than what financial markets currently expect, and difficult to reconcile with the pivot hypothesis.

함의: 그러게, 우리는 왜 뜬금없이 중앙은행이 인플레이션을 통제할 수 있다는 근거없는 믿음을 가지게 됐는가.

China again warned that its military would take action if House Speaker Nancy Pelosi makes a landmark visit to Taiwan, as speculation mounted in Taipei that she could arrive there as soon as Tuesday. The People’s Liberation Army “won’t sit idly by” if Pelosi visited Taiwan, Chinese Foreign Ministry spokesman Zhao Lijian said Monday, echoing similar comments made by the Defense Ministry last week. “Her stature as the No. 3 US official means a trip would be highly sensitive,” Zhao told a regular press briefing in Beijing. “As to what measures, let’s wait and see whether she insists on this visit.”

함의: 나 가만히 안있을거야(won’t sit idly by)란 말하는 사람치곤... 그렇지만, 지정학적 위험은 높아지고 있음.

The new month has started a little less auspiciously than the old one ended, with US financial assets trading moderately lower overnight. Mind you, the magnitude is hardly Earth-shattering, and European and Asian equities are on the green side of the ledger, for the most part. Friday’s close helped cement the current rally as the largest since the S&P 500 fell from its all-time high. The key question is obviously what comes next? The equity surge in March ended fairly abruptly, with a small dip on the last day of the month and then a sharp drop at the start of April. Indeed, it is amazing how often a simple change of the calendar month can bring about a change in the tone of market trading.

함의: 3월 반등 이후 4월 하락을 기억하는가? 때때로 월이 바뀌었다는 이유로 시장 심리가 급변하는 것은 놀랍다.

Portfolio managers are the only group of investors that appreciate tech stocks as much as value assets, according to the MLIV Pulse survey. The majority of 1,562 respondents in the survey said that value stocks will offer better performance over the next six months. Still, they expect big tech shares to gain, and point to Microsoft and Amazon as the ones with the most potential. After a 13% decline in the S&P 500 so far this year, most of the respondents said, the index is a better place to invest than Treasuries in the near term.

함의: 설문 응답에 따르면 가치주만큼 기술주를 선호하는 유일한 집단은 포트폴리오 매니저였음. 응답자 대부분은 큰 폭 하락한 지수가 당분간 국채보다 나은 투자가 될 것이라 답했음.

Stock futures and the Chinese yuan don’t like the report that US House Speaker Nancy Pelosi is headed for Taiwan on Tuesday. S&P futures are down around 0.7%. The move threatens to derail last week’s rally. The speculators who keep adding to their shorts may now get some satisfaction. The offshore yuan dropped 0.4% in a sign of the potential turbulence that the visit may cause. China’s military won’t sit idly by if Pelosi visits Taiwan, a Foreign Ministry spokesman said.

함의: 하원의장의 화요일 대만 방문 일정이 발표된 뒤 미국 선물과 위안화는 부정적 반응을 보이며 해당 일정이 지난 랠리에 제동을 걸 수 있음을 암시함.

US manufacturing activity continued to cool in July as factories dialed back production in the face of shrinking orders and rising inventories. The Institute for Supply Management’s gauge of factory activity eased to 52.8, the lowest level since June 2020, from 53 a month earlier, according to data released Monday. Readings above 50 indicate expansion, and the latest figure compared with a median projection of 52 in a Bloomberg survey of economists. The group’s measure of production also fell to a more than two-year low, and its gauge of new orders remained in contraction territory for a second month. The figures highlight softer demand for merchandise as the economy struggles for momentum.

함의: 공급관리협회 제조업 지수가 신규주문 및 생산 감소로 2020년 6월 이후 최저치를 기록함.

Yup, Prices Paid Look Like a Commodity Story. The prices paid component of the ISM certainly grabs the eye, but I am not sure if it tells us anything new. My quick reaction posited that it was a function of lower commodity prices, and a cursory study appears to confirm the view. The chart below shows the manufacturing prices paid overlaid with the (arbitrarily-chosen) 6-month change in the headline Bloomberg Commodity index -- as you can see, there is a lot of correlation.

함의: 공급관리협회 제조업 지수 내 지급 항목은 원자재 가격 6개월 변동분과 밀접한 상관관계를 가지며, 지급가격은 지속 하락하고 있음.

Large speculators in the futures market, mostly hedge funds, turned net short on S&P 500 futures contracts in mid-June as the 500-member index plunged to 3,666.77. They’ve been net-short the futures for six consecutive weeks since then, and last week boosted the net bearish positions to nearly 238,000 contracts, the most since June 2020, data compiled by the Commodity Futures Trading Commission released on Friday show. The strategy hasn’t paid off, at least so far: the S&P 500 just clocked its best month in 20 with a 9.1% bounce, while the Nasdaq 100 Index posted its second-best month since 2010. “Last week’s rally was a huge ‘pain trade’,” said Dave Lutz, managing director at JonesTrading Institutional Services. “The S&P holding the 100-day moving average is going to be very painful for those short.”

함의: 지난 6월 중순 이후 많은 헤지펀드가 지수에 대한 매도 포지션으로 돌아선 뒤 월간 큰 폭 반등을 보인 시기를 포함 6주간 고통 속에서도 매도 물량을 확대했고, 현재 2020년 6월 이후 최대 규모의 순매도 포지션이 구축됨.

"Life is the art of drawing without an eraser."

- John W Gardner

The gap between short-term pricing expectations of diesel and gasoline is widening, indicating industrial demand is more resilient to high prices than consumers being squeezed at the pump. That suggests diesel may go higher due to very tight global supply as winter approaches. Global diesel inventories are still low, and supplies from China -- the world’s largest exporter of distillates -- remain muted. To offset a drop in flows, Europe boosted imports from Americas. And despite environmental concerns, looming natural-gas shortages are forcing European power plants to switch to alternative fuels.

함의: 경유와 휘발유 간 가격 차이가 지속 확대되고 있는데, 산업용도와 난방용도로 공히 사용되는 경유는 수요 대비 공급부족이 심화되고 있기 때문이며, 유럽의 경우 환경오염 우려에도 불구 다시 발전소를 가동해야 함.