Mikkel Rosenvold
3 weeks ago

Analyst: Are you paying attention to China?

Recent Chinese initiatives to support struggling developers indicate a more serious effort compared to the "cry wolf" attempts of 2023, says analyst Andreas Steno. This article explores whether the Chinese economic trend is just beginning.
poringdown@gmail.com / DepositPhotos
poringdown@gmail.com / DepositPhotos

Chinese Economic Trends and Market Response

Chinese equity trends have been strong despite new US tariffs. Recent government measures to bolster the real estate sector appear more substantial than past efforts. Local governments are being instructed to buy unsold homes from struggling developers to convert them into affordable housing, marking a significant shift.

Industrial Production and Economic Recovery

Industrial production in China has returned to pre-pandemic levels, with recent strong momentum. This recovery trend in Chinese equities appears sustainable. The success of the Chinese authorities seems more likely this time as the industrial sector is performing robustly, providing a positive sentiment boost.

Investment Implications

Steno Research is considering increasing exposure to China, noting strong data trends in industrial production and supportive policies in real estate. The potential impact on commodity markets is significant, as China has been heavily buying copper, iron ore, and gold rather than oil, signaling a change in strategy. The traditional relationship between commodity markets and Chinese economic activity may no longer apply.

Sector and Geographical Trends

In the equity market, consumer discretionary segments in the US tend to benefit from a Chinese economic rebound. However, materials sectors might be overextended. Geographically, MSCI Brazil and MSCI Indonesia are now the largest "betas" to China, well-positioned to benefit from the potential breakdown of US-China relations. South Korea also presents opportunities, though it is more entangled in geopolitical tensions.

Future Outlook

Steno Research maintains a positive portfolio tilt and is considering direct exposure to China. The ongoing recovery in industrial production and supportive real estate policies offer compelling reasons to be optimistic. However, the response of commodity markets, particularly oil, will be critical in shaping future investment strategies.

Crypto Portfolio: Market Narratives and Outlook

The crypto market has shown resilience despite recent bearish outlooks, with Bitcoin surging 5% following a softer US CPI report. However, Steno Research remains cautious due to the lack of compelling long-term narratives.

Market Dynamics

The macroeconomic environment suggests a potential rise in crypto prices, but crypto-specific factors point to a downward trend. Institutional holdings in Bitcoin ETFs have not met expectations, and much of the current market activity is driven by retail investors and basis trades rather than genuine long positions.

Key Factors to Watch

US-based Bitcoin spot ETFs have seen net inflows, indicating a more balanced market. The upcoming SEC decision on an Ethereum spot ETF could also impact market sentiment. Despite recent positive momentum, Steno Research remains bearish but acknowledges the potential for a market shift.


Investors should closely monitor Chinese economic trends and their implications for global markets, particularly in commodities and equities. In the crypto space, market dynamics and regulatory decisions will play crucial roles in shaping future trends.


The information provided by this Site is for general informational purposes only. All information on the Site is provided in good faith, however we make no representation or warranty of any kind, express or implied, regarding the accuracy, adequacy, validity, reliability, availability or completeness of any information on the Site.

More News

5 hours ago Federal Reserve Sees Progress on Inflation, Adjusts Rate Cut Expectations The Federal Reserve has adjusted its forecast for rate cuts this year, citing persistent inflation despite recent progress. High borrowing costs are expected to linger, impacting consumers and the broader economy.
6 hours ago Bitcoin Holds Steady as Fed Maintains Interest Rates: A Sign of Economic Caution In a cautious move, the U.S. Federal Reserve opted to keep interest rates unchanged, causing Bitcoin to hold its ground. Read more about the economic implications and market responses here: "The Committee judges that the risks to achieving its employment and inflation goals have moved toward better balance over the past year."
9 hours ago High-Stakes Showdown: Tesla Shareholders Decide on Elon Musk’s $56B Pay Package Tesla shareholders are set to cast their votes on Elon Musk's controversial $56 billion compensation package, a decision that could have far-reaching consequences for the company.
12 hours ago USDMXN: A Golden Opportunity USDMXN: A Golden Opportunity Amid Mexican Election Sell-Off, Says Steno Research Analyst
1 day ago EU's New Tariffs on Chinese EVs Hit Tesla and BYD Stocks! Tesla (TSLA) and BYD (1211) Stocks Plummet After EU Tariff Announcement
1 day ago Macro Mondays: Escaping the TRAP of Sideways Markets Andreas Steno, Mikkel Rosenvold And Mads Eberhardt talk macro and crypto
1 day ago EU launches trade war with China In a bold move that has sent ripples through global markets, the European Union has effectively launched a trade war against China. This decision, announced just three days after the European Parliament elections, raises significant questions about the influence and timing of the EU’s legislative body.
1 day ago July Bloodbath: Metals Set for Major Crash? Brace yourselves for a tumultuous July in the metals market! Industry experts are sounding the alarm as cluster risks in metals like gold, silver, and copper threaten a significant downturn. Here's why July could spell disaster for metal investors.
1 day ago 5 Stories To Invest in for Emerging Markets 5 Stories that might interest you if you're into investing in Emerging Markets