JPMorgan’s China Calls Show Market Timing Is Tough. Predicting the returns of Chinese technology stocks is harder than ever in an age of shifting government policy, rising interest rates and cooling economies. Take JPMorgan Chase & Co.’s Alex Yao. He downgraded 28 Chinese internet stocks in March, calling the industry “uninvestable” --- right before an epic rally. He then shifted to upgrade the sector in mid-May and, while indexes are higher since then, the biggest company, Tencent Holdings Ltd., is down nearly 20%. Alibaba Group Holding Ltd. is a hair’s breadth away from wiping out all the gains since Yao upgraded the stock. An investor following Yao’s recommendations on Tencent would have lost 48% over the past year, worst among the analysts following the stock, according to Bloomberg-compiled data. Still, Yao has plenty of company. Strategies from many analysts on the stock would have generated losses of more than 30%. Yao and JPMorgan didn’t respond to requests for comment. 

함의: 중국을 이해하고 제대로 투자하기 쉽지 않음.

Life is full of little ironies, isn’t it? Recession talk is all the rage these days, and based on last week’s GDP release the US has met the criteria for a so-called “technical” recession. Yet corporate earnings continue to expand and employment growth remains robust for now -- hardly what you’d expect during an economic contraction. Obviously, inflation makes it more difficult than usual to tease out the true state of real growth from nominal variables. Still, throughout the last couple of weeks market pricing has actually seen the imputed chance of an economic contraction decline -- ironic indeed. Parsing through some ancillary metrics on economic activity delivers mixed messages on how imminent the threat of a “true” recession actually is. Ultimately, we’re left none the wiser... which suggests that uncertainty and realized volatility will remain elevated. 

함의: 경기침체에 대해 우려를 높였다 낮췄다 반복하며 확실한 것은 불확실성과 변동성은 확대될 것임.

"Never be afraid to sit awhile and think."

- Lorraine Hansberry

Federal Reserve officials said they want strong evidence that the hottest inflation in four decades is on a sustainable downward path before declaring victory in their fight against it. With consumer prices rising 9.1% in June from a year earlier, the Fed has “a long way to go” on reaching price stability around a 2% inflation target, San Francisco Fed President Mary Daly said Tuesday in an interview on LinkedIn. “We are still resolute and completely united” on achieving the objective, she said. Her Cleveland counterpart, Loretta Mester, told the Washington Post during a live-streamed event she wants to see “very compelling evidence” that month-to-month price increases are moderating before saying that the US central bank’s tightening cycle is accomplishing its goal of curbing inflation.

함의: 인플레이션이 통제되고 있다는 강력한 증거가 보일 때까지 긴 싸움을 이어갈 것이라고 함.

A giant Chinese supplier of electric-vehicle batteries decided to push back announcing a multibillion-dollar North American plant to supply Tesla Inc. and Ford Motor Co. due to tensions raised by House Speaker Nancy Pelosi’s trip to Taiwan, according to people familiar with the matter. Contemporary Amperex Technology Co. Ltd., the world’s biggest maker of batteries for electric vehicles, has been considering at least two locations in Mexico near the Texas border, as well as sites in the US, for the plant. China’s CATL has been in an advanced stage of site selection and negotiating incentives, in anticipation of announcing its selection in the coming weeks. CATL now plans to wait until September or October to make the announcement, the people familiar with the process said Tuesday, asking not to be identified as the information isn’t public. The concern is that an announcement could stoke tensions at a sensitive time in US-China ties amid the controversial Pelosi visit to Taiwan, they said.

함의: CATL은 테슬라와 포드 공급망을 위해 공장 부지 선정과 보상금 협의 단계에 있었으나 미국 하원의장의 대만 방문에 따른 갈등 고조로 한두달 미루기로 함.

The Federal Reserve may be able to slow inflation without sparking a recession in the US economy, Federal Reserve Bank of St. Louis President James Bullard said. The US central bank has developed over time respect for its ability to tame price increases, marking a contrast to the 1970s, Bullard said Tuesday. And that increases the odds policy that makers can succeed in cooling prices while minimizing pain for the economy, he said. The same is true for the European Central Bank, he also said. “Since modern central banks have more credibility than their counterparts in the 1970s, it appears that both the Fed and the ECB may be able to disinflate in an orderly manner and achieve a relatively soft landing,” Bullard said in remarks prepared for delivery at an event organized by the Money Marketeers of New York University. 

함의: 중앙은행은 70년대와 달리 경기침체를 피하면서 인플레이션을 통제해 연착륙을 달성할 것이라 자신함.

The comments from Fed officials including Mary Daly, Loretta Mester and Charles Evans served to highlight the challenging backdrop of rising borrowing costs, price pressures and slowing economic growth confronting markets. San Francisco Fed President Daly said the Fed has “a long way to go” on reaching price stability around a 2% inflation target. Cleveland counterpart Mester said she wants to see “very compelling evidence” that month-to-month price increases are moderating.

함의: FOMC 이후 공식석상의 발언이 이어지며 시장의 앞서나갔던 기대를 되돌리고 있음.

Battery supply demand dynamics to be seen as more localized. The proposed US EV tax credit supports focus on more localized battery supply demand dynamics, in our view. Although cell manufacturing in general will likely see overbuilt capacity during 2022-25, with the global average utilization declining towards 56% by 2025, we note the oversupply will be mostly in China while the US and Europe markets will likely remain tight, with utilization largely above 100% over 2022-25E. Korean battery makers can benefit from the US market share gains. While we take no view on the passage of this bill, if passed we see the proposed subsidy as a significant positive for Korean battery makers who are significantly expanding market share in the US (we estimate LGES / SKI market share growing to 26% / 10% (ex JV) by 2025E vs <10% / 0% in 2021, respectively). China battery makers expansion plans within the US have been more limited, and on the margin we think their export competitiveness will weaken given the potential supply chain localization required in the US to qualify for subsidies.

보고서: 미국 전기차 배터리 법안은 현지화를 더 가속화 할 것인데, 미국 투자에 제한적인 중국보다 현재 확장을 지속하고 있는 한국 기업들이 이에 수혜를 입을 것으로 봄. (Goldman Sachs - Implications from proposed US EV tax credit reform to Asian battery makers)

China halted natural sand exports to Taiwan and some fish and fruit from the island on Wednesday following US House Speaker Nancy Pelosi’s arrival on the island. The sand export announcement, made in a statement by China’s Ministry of Commerce, said the move was based on provisions of related law but gave no further details. China’s General Administration of Customs said in a separate statement that the suspension of imports was due to excessive pesticide residue detected “multiple times” on products since last year, as well as on some frozen fish packages that tested positive for coronavirus in June.

함의: 중국의 전형적인 무역 제재 수단인 '바이러스 검출'을 사유로 대만의 생선 및 과일에 대한 수입을 중단함.

Beijing announced six exclusion zones encircling Taiwan to facilitate live-fire military drills from Thursday to Sunday. Some of the areas cross into the island’s territorial waters, threatening to disrupt airline traffic and shipping in the Taiwan Strait -- one of the world’s busiest trade routes. Early Wednesday, state broadcaster China Central Television said the country had launched joint navy and air force exercises around Taiwan. The operations will include “regular-guided fire testing in the eastern waters” -- or missiles -- off Taiwan, the PLA said. 

함의: 목요일부터 일요일까지 대만을 둘러싼 6개 지역서 중국의 군사훈련이 시행되며, 일부 항공 및 해운 항로가 통제 범위에 포함됨.

Taiwan Turmoil Prompts Detours, Delays for Global Shipping. China’s announcement of military drills around Taiwan as US House Speaker Nancy Pelosi visits the island is creating ripple effects across global supply chains, prompting detours and delaying energy shipments. Gas suppliers are rerouting or reducing speed on some liquefied natural gas vessels currently en route to North Asia, according to people familiar with the matter. Shipments to Taiwan and Japan this weekend will be affected, said the people, who requested anonymity as the information isn’t public.

함의: 중국이 미국에 대한 강경한 대응의 일환으로 군사훈련을 발표하자 LNG 운반선들이 운항 속도를 줄이거나 경로를 우회하며 물류 지연의 신호가 나타나고 있음.

Electricite de France SA said it’s likely to make further cuts to its nuclear reactor output as scorching weather pushes up river temperatures, bringing the energy crisis in the European Union’s second-largest economy into sharp focus. The French utility said late Tuesday that power stations on the Rhone and Garonne rivers will likely produce less electricity in the coming days, while there will be a minimum level of output to keep the grid stable. A heat wave is pushing up river temperatures, restricting the utility’s ability to cool the plants. The restrictions threaten to further push up power prices, which climbed to record levels in France and Germany on Tuesday. Europe is suffering its worst energy crunch in decades as fallout from Russia’s invasion of Ukraine drives a surge in natural gas.

함의: 러시아로 인해 에너지 수급에 어려움을 겪는 중에 원자력 발전도 큰 도움이 되지 못할 것, 이상기후로 강의 온도가 상승해 플랜트 냉각이 용이치 않아 안정적인 그리드를 유지하려면 오히려 가동률을 낮춰야 한다고 함.

The rally in stocks since June’s low has been built on shaky foundations and, according to many market watchers, a key ingredient for a solid base is still missing -- more cuts to earnings estimates. An analysis of the past four recessions by Bank of America Corp. showed that the S&P 500 Index bottomed only after earnings per share forecasts had fallen either to or below the level they were at when the market last peaked. Fast forward to now -- while projections have fallen, they are still about 6% higher than at the time of January’s all-time record. “We’re still in the very early innings of the downturn and estimate cuts,” Bank of America strategist Savita Subramanian said. “Was June the big low? Our bull market signposts say no.”

함의: 불안정한 상태에서 쌓아올려진 지수가 저점을 지났는지 논하려면 한 가지 조건이 부족한데, 과거 사례 분석을 통하면 하락 전 지수 최고점에서 형성 된 이익추정치보다 현재 이익추정치가 더 낮아져야 한다는 것(지금보다 추정치 하향이 더 필요)임.

The three-month London interbank offered rate for dollars climbed to a nearly 14-year high as traders brace for steady interest-rate hikes from the Federal Reserve, backing away from speculation the central bank will ease up as the economy shows signs of cooling. The Libor rate rose for the fourth straight session, climbing roughly 2.5 basis points to 2.83%, the highest since November 2008. The spread of Libor over overnight index swaps was unchanged at 17.9 basis points. The move follows Tuesday’s surge in Treasury yields after several Fed policy makers’ indicated that they’re not close to done fighting inflation, prompting traders to reduce bets on rate cuts next year. Fed swaps are pricing about 60 basis points of additional hikes for the September meeting, indicating some expectations the central bank will enact another three-quarter-point move at its next gathering. 

함의: 중앙은행 정책 입안자들의 인플레이션 통제 의지를 확인한 뒤 리보금리는 2008년 이후 최고 수준까지 상승, 9월에도 또 한 번의 75bp(현재 60bp)를 책정하고 있음.