stocks

The US economy is experiencing a phenomenon similar to what preceded the recession of 2007-2008.

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US economy
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#recession #economy #gdp #gfc #vvd

The US economy is experiencing a phenomenon similar to what preceded the recession of 2007-2008.
📍We usually estimate the state of the economy by GDP, which continues to grow in real terms (taking into account inflation) – this is shown by the brown line on the charts. However, if we pay attention to gross domestic income in real terms, that is, the sum of all incomes in the economy adjusted for inflation, then this indicator has been falling for the second quarter in a row (marked on the upper graph). The main reason for this is a decrease in corporate income.
In the United States, the process characteristic of the beginning of the recession begins – a reduction in income. Similar dynamics of indicators were observed before the Great Financial Crisis (shown in the lower graph), and who knows, perhaps the coming crisis will become even more majestic. @ESG_Stock_Market

US economy
US economy
US economy
US economy

When Little Pent-Up Demand Is Left

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When Little Pent-Up Demand Is Left
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Morgan Stanley, Sarah Wolfe on behalf of (chief economist) Ellen Zentner:

When Little Pent-Up Demand Is Left

An extraordinary rise in spending on services, combined with a modest recovery in the consumption of goods, led to a decrease in the personal savings rate by a ten-year minimum. Now the recovery of real spending on services is almost complete, which means that the growth of spending on services should slow down, while spending on goods continues to return to its pre-Covid share of income and PCE. Since spending on services accounts for 65% of the share of consumer wallets, the slowdown in growth contributes to lower inflation in the service sector. We expect that a further return (to past levels) of goods consumption, combined with weak growth in the services sector, will allow the Fed to approach the 2% inflation target without causing a recession.

Let’s rewind 2.5 years ago. It’s January 2021, and households are gradually coming out of the hibernation caused by Covid, but the widespread spread of the vaccine is still a few months away. Consumers allocate 5% more funds from their wallet for goods than before Covid, which contributes to record consumption of consumer electronics, household and repair goods, sporting goods and recreational vehicles. Also 2.5 years ago, we made a highly competitive forecast that the spread of the vaccine in the spring of 2021 would lead to a sharp increase in costs for services and payback of goods.

This return has occurred, but paired with greater-than-expected demand, thanks to unprecedented fiscal stimulus, excess savings and a substantial supply shortfall. Thus, we observed not only a shift from goods to services, but also an increase in total spending. The result was a 13 percent increase in goods inflation for almost three years, an acceleration in services inflation and a return to pre-Covid spending habits, which are much larger in real rather than nominal terms. (Figure 1). The biggest gain from Covid was received by stay-at-home products….
..and we have seen the most sustained recovery in discretionary services, including catering, accommodation, public transport and recreational services.

The increase in interest rates led to a decrease in spending on durable goods, which contributed to a slowdown in core goods (2.1% YoY as of April 2023 compared to 9.7% yoy a year ago and we expect that further deflationary pressure will reduce it to -0.2% YoY by December 2023 and to -1.3% YoY by December 2024.). As the supply of labor increases and deferred demand decreases, the pressure on inflation in the service sector begins to weaken. Inflation of basic goods is projected to decline further, and core-core services (core services excluding housing and medical prices) inflation has begun to slow down and as of April 2023 increased by 6.6% YoY, down from a peak of 7.4% in February 2023. The greatest impact on core-core services should occur in the second half of 2023 (5.4% YoY by December 2023 and 4.2% YoY by December 2024).

The growing savings rate leads to a reduction in the overall “pie” of spending, and households have a reduced need and desire to spend on goods and services. This makes it easier for the Fed to achieve the 2% inflation target without causing a recession. There is a potential to reduce the consumption of goods due to reduced needs and rising prices, as well as opportunities to slow down the consumption of services without it becoming negative. Real consumption of services, which increased significantly in 2021 (6.3% YoY) and 2022 (4.5% YoY), is expected to return to pre-Covid levels in the future. @ESG_Stock_Market

Nomura Securities, Charlie McElligott – My opinion about NVDA

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Nomura Securities, Charlie McElligott (in his note to clients by mail)
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Nomura Securities, Charlie McElligott (in his note to clients by mail):

“My opinion about NVDA: when you see how the 4th largest stock in SPX and QQQ rallies at one point by +28% after-hours (vs an options implied move of ~7.5%) on the shock of profit growth, it’s just an absolutely brutal demonstration of strength, saying that that this generative AI boom is a “Real Thing”… when revenue exceeded $11.0 billion. compared to the previous forecast of $7.2 billion (+53% compared to the previous forecast – WUT?!) … when the excess of the forecast > the market capitalization of 93% of Russell 2000 shares … and while the EPS estimate for 2024 was $4.60 before the publication of profit, and now some analysts are throwing numbers, almost twice as high as these forecasts for the next year…and after the company added 1.5 Intels on cap’y per night…It’s just a fool’s mistake – trying to pick the top and short MegaCap Tech or the US stock index as a whole on the “valuation” thesis alone (this, in my opinion, will require a likely “inflation surprise/escalation of policy tightening” additionally), as these companies prove again and again the old thesis of “secular growth”, which made these stocks incredibly popular at this stage: they don’t need a hot economic cycle to surpass revenues and profits, as they are simply liquid, money-generating machines.” @ESG_Stock_Market

Dollar LIQUIDITY what is happening now, everyone is already confused

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Dollar LIQUIDITY what is happening now, everyone is already confused
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Dollar liquidity measures the ability of the dollar to be used for transactions and activate other forms of financial assets. Currently, this presents a confusing situation for investors. Let’s take a closer look

LOANS

Curiously, at the end of March the volume of reverse REPOs for non-residents halved

LOANS

But foreign companies have increased loans, and quite aggressively

But foreign companies have increased loans, and quite aggressively

This could indicate a shortage of dollars outside the U.S. financial system.

FRS BALANCE

Fed’s balance sheet shrank by $17 billion in the week, a steady trend relative to last year The Fed's balance sheet shrank by $17 billion in the week

The blue line is the annual dynamics of the Fed balance sheet, the green and red are the mortgage bonds and treasuries on the Fed balance sheet. As we can see, all indicators are below zero, i.e. below last year.

DOLLAR LIQUIDITY

The Ministry of Finance account decreased by $54 billion, with about $80 billion remaining in the account of the Ministry of Finance, which is a historically low value – this is marked by the blue line on the chart

The red line is non-resident reverse repos, which rose by $12 billion during the week and returned to historic highs.

The red line is non-resident reverse repos, which rose by $12 billion during the week and returned to historic highs.

EXCESS RESERVES

EXCESS RESERVES

Excess reserves that are not generating income (blue) are down $34 billion and those that are generating income (red) are up $78 billion,

 

The growth of reverse repos continues to generate losses for the Fed, with $48 billion in losses already accumulated.

LIQUIDITY DYNAMICS

Liquidity in the system decreased by $40 billion (blue line) due to absorption from reverse repos, and also in a sideways trend after the start of the banking crisis

LIQUIDITY DYNAMICS

The U.S. stock market (the red one is the S&P500) has gotten off the ground, and the accumulated divergence is quite significant.

FINANCIAL CONDITIONS

According to the Federal Reserve Bank of Chicago, credit conditions have begun to tighten (blue line), but for some reason the dollar is not feeling it and continues to weaken (red line is the annual trend of the dollar) - suggesting that the dollar market is "long-covered" before rising.

According to the Federal Reserve Bank of Chicago, credit conditions have begun to tighten (blue line), but for some reason the dollar is not feeling it and continues to weaken (red line is the annual trend of the dollar) – suggesting that the dollar market is “long-covered” before rising.

FOREIGN EXCHANGE BALANCES

U.S. financial system currency balances are unchanged for the week (blue line), remain at the levels of the beginning of the year

The red line is a reversal of the dollar, last week's data, but we know that the dollar has remained under pressure this week, which locally does not fit with the dynamics of the volume of currency balances.

The red line is a reversal of the dollar, last week’s data, but we know that the dollar has remained under pressure this week, which locally does not fit with the dynamics of the volume of currency balances.

CONCLUSION

1) The picture with the dollar is interesting: increased demand from non-residents in two of the three considered directions, as well as flat dynamics of currency balances and reduced liquidity, combined with tightening credit conditions – suggesting that the current dollar decline is the final one before the start of growth.

2) The Treasury bill also looks curious, and if tax revenues are lower than expected because of lower corporate earnings, everybody will be talking about a liquidity shortage at one of the guarantors of stability in the U.S. financial system.

3) There is also an expressive divergence accumulated between the S&P500 index and the volume of free liquidity in the system, which can be interpreted as potential pressure on the stock market, especially since the cycle of liquidity withdrawal by the Ministry of Finance is ahead, i.e. the liquidity indicator will start to decline steadily.

4) I continue to believe that a new risk-off wave is coming, which will be heavier relative to the spring 2022 wave, which will end in the summer with a move to control the yield curve or lower rates, I am leaning towards the first instrument. @ESG_Stock_Market

World inflation data. Inflation in the US, what has changed? Inflation in Europe #inflation

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World inflation data. Inflation in the US, what has changed? Inflation in Europe #inflation
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World inflation data. Inflation in the US, what has changed? Powell’s inflation indicator. Inflation in Europe. I’ll give you a couple of tips

1️⃣ US labor market: still hot. The situation with vacancies remained very aggressive, the number of open vacancies even increased and is 1.9 times higher than the number of unemployed, which is a lot. Weekly applications for unemployment benefits remain below 200 thousand. The salary fund is growing by 7.7% YoY – this is a couple of tenths less than it was a quarter earlier, but still significantly higher than what would meet the Fed’s 2% inflation target. The flow of nominal income remains quite aggressive.

2️⃣ Excess savings remain high, but their “eating through” has accelerated. The volume of deposits and money market funds in households is ~ $3.0 trillion, although it has dropped to 95% of disposable income, but it is much higher than the docklike ~80%. This allows American households to save less and spend more – the savings rate of Americans has increased slightly, but still remains at extremely low levels of 4.4%. Although the banking crisis accelerates the processes in the first quarter, but there is still a long way to normalize here – there is something to spend.

3️⃣ The debt burden is low, but it has become more difficult to borrow. The amount of debt of the population relative to their disposable income of 99% is even slightly lower than in previous quarters. The decrease is due to the slowdown in mortgages (the main part of the debt) against the background of increased rates, the growth of nominal incomes and, of course, the write–off of student loans at the expense of the budget – this played a major role. Americans spent 9.7% of their income on debt servicing, which is very, very little by historical standards. There is still enough stock here, although high mortgage rates limit the possibilities of borrowing, but writing off student debts allows you to borrow several hundred billion extra. Mortgage debt has remained at lows since the 1960s and is 28.8% of the value of real estate in the United States.

4️⃣ Wealth Effect: The value of US household assets remains high. The total asset value of American households remains extremely high at 874% of disposable income. This is still above the docklike levels, but the situation varies for different income groups. The situation in the TOP10 is much better, both due to the increase in the value of financial assets and real estate. At BOTTOM90 – mainly due to the growth in the volume and value of real estate, deposits, pension plans and long-term goods. In general, the situation here is not yet conducive to Americans starting to save.

In general, we can say that the growth potential of Americans’ consumer spending remains high 6-8% YoY, which is much higher than what the Fed would like to see. At the same time, the budget incentive has rather increased, both due to the write-off of loans, and due to various kinds of social payments. In general, all this supports a fairly high potential for maintaining the increased growth rates of nominal expenditures, and as a result, inflation. The first “explosions” in the financial market may somewhat accelerate the processes (tightening of financial conditions), but given that history was immediately flooded with money, the impact will be limited.

​​#USA #inflation #economy #Fed #debt #rates #dollar

Powell ‘s inflation indicator is stability …

The report on the consumer spending deflator came out slightly better than market expectations, prices rose by 0.3% mom and 5.0% YoY. And even core inflation came out not so bad 0.3% mom and 4.6% YoY – the market was waiting for 4.7% YoY. Commodity inflation against the background of migration of consumption into services is modest and amounted to 0.2% mom and 3.6% YoY. Although the disinflationary effect of prices for used cars continued here (-2.8% mom and -12.3% YoY) – the dynamics is strange, because wholesale prices for them have been rising for several months in a row, and earlier prices were correlated. Prices for short-term goods increased by 0.3% and 5.4% YoY.

The main inflation in services, although not to say that it is huge here, is stable 0.3% mom and 5.7% yoy. Housing is getting more expensive by 0.7% mom and 8.2% yoy, but the Fed is turning a blind eye to it, because there is inertial growth. The most important thing is where J. is looking.Powell and Co. are services inflation excluding housing and energy prices – they added 0.3% mom and 4.7% YoY – stability, in January it was also 4.7% YoY. The increase in these prices for three months amounted to 5.0% in annual terms. In this part of inflation, nothing actually changes, something is accelerating, something is slowing down, but the index has been dead in the range of 4.2-5% annual growth for two years now. With a neutral real rate of about 0.5%, the Fed’s policy is clearly not up to the “restrictive policy” (the real rate is 1-2%)…

​​#eurozone #inflation #ECB #rates #economy #EUR

Euroinflation

Euroinflation

Inflation in the eurozone in March was 0.9% mom, although annual inflation slowed to 6.9% YoY, this slowdown is mainly due to the high base of last year. The only factor slowing price growth was energy (-2.2% mom and -0.9% YoY), everything else was actively getting more expensive.

Food products produced 1.3% mom and 15.4% YoY. Without energy and food, core inflation is 1.2% mom and a record 5.7% YoY. Although the price growth for goods without energy slowed down a bit (6.6% YoY), but the price growth in services accelerated to 5% YoY. The influence of energy has gone, but inflation has remained.

At the same time, unemployment is at historical lows of 6.6%.
With the economy, everything is not particularly positive – real retail sales in Germany fell by 1.3% mom and collapsed by 7.1% YoY, although nominal sales increased by 2.6% yoy. Real sales were 1.6% lower than three years ago.

Consumption of goods in France fell by 0.8% mom and 4.1% YoY in real terms. First of all, this applies to food (-1.5% mom and -9% yoy). Consumption in France is at the levels of a decade ago, but this is in real terms. Protests against the background of pushing pension reform will add additional negativity to the French economy.

Low unemployment and labor shortage are side by side with a drop in living standards against the background of high inflation – such an entertaining reality. So the real strikes are still ahead here.

​​#Germany #inflation #Eurozone #economy #rates #Crisis

Inflation in Germany is not retreating

Inflation in Germany is not retreating

The growth of consumer prices in March, according to preliminary data, amounted to 0.8% mom and 7.4% yoy. Although annual inflation has slowed down, this is only the effect of the base of last year, when prices jumped by 2.4% mom in a month.

According to the Eurostat methodology, consumer prices in Germany are growing by 1.1% mom and 7.8% YoY. The growth of energy prices has slowed down sharply (+3.5% YoY compared to 19.1% yoy in February) – there are a lot of subsidies. But the growth of food prices accelerated even more (+22.3% YoY versus +21.8% in March). The growth of prices in services accelerated to 4.8% YoY, even though rents in Germany continue to rise by a modest 2% (but much is administratively regulated here).

In Spain, it is also interesting, inflation was 0.4% mom and due to the effect of the base collapsed to 3.3% yoy. But core inflation in Spain was 0.7% mom and 7.5% YoY.

So the ECB, as some Eurobankers say, “still has a lot of work to do”, it is unlikely that monthly prints of 0.7-1% mom correspond to the ECB’s goal. The reaction of the markets rather indicates that they continue to believe in the story that rates will rise and everything will be fine… and there will definitely be no SVB in Europe … well , we ‘ll wait )

#germany #sentiment #recession #crisis #economy

Despite the depressive information background associated with the ECB rate hike, high inflation, the likelihood of a recession and problems in the banking sector, a positive mood prevails in German business circles in March. However, it is worth remembering that the more expectations are inflated, the deeper the disappointments will be

#recession #europe #ecb #rates #economy

recession in Europe has reached 100%

The MacroMicroMe team used the ECB 2019 model to estimate the likelihood of a recession in the EU. This model is based on the real money supply and the state of the yield curve. The results showed that the probability of a recession in Europe has reached 100%, which is an exceptional event over the past 40 years.

And remember: #Fed #rates #qt #prep #finance #economics

The Fed is in the toughest monetary policy tightening cycle since 1983

The Fed is in the toughest monetary policy tightening cycle since 1983: rates are rising faster and have reached historically high values, which is reflected in the red line on the chart.
However, the worst thing is that the financial system is already under stress, and inflationary pressure in the US economy remains stable. The monthly increase in core inflation corresponds to the average rate of the 80s of the last century, which indicates that even such a strict policy of the Fed is not able to effectively combat inflation. Moreover, business activity revived in March, which is a signal of sustained inflation. @ESG_Stock_Market

Moderate greed in crypto, greed in stocks is in the risk zone. Be cautious ♨️. Fear greed index

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Fear and greed nasdaq
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Fear and greed nasdaq, moderate greed in cryptocurrencies, greed in stocks is at risk. What are we trying to say?

fear greed index

Why was the stock market depressed on Friday? US: The overheated labor market doesn’t want to cool down. Fear and greed nasdaq

Statisticians traditionally revised the U.S. labor market numbers in February, with historical data revised up by 813,000, and the gain in employment in January was an incredulous 517,000, of which 443,000 was in the private sector. So quite unexpectedly there was another million employed, i.e., the labor market was even hotter than thought. Of course, the main thing here is the data revision, but compared to the December report, there were 1.3 million more people employed in January.
The unemployment rate in January was at its lowest level since 1969, dropping to 3.4%. Labor force participation rose slightly (62.4%), but it’s still decently below pre-decline levels. The labor force participation rate has also risen slightly to 60.2%, although it too remains below pre-set levels, and that’s with the current near-zero unemployment rate. The fact that the labor market has even improved in recent weeks was indicated by the benefits data, which fell below 200K per week, the current report has confirmed it.

With wages also turned out to be somewhat better, the slowdown in 2022 was lower than previously thought, and growth even accelerated somewhat in January. This was not due to an increase in hourly wages (+0.3% mom), but more to the estimate of hours worked. Production and non-management payrolls added 0.8% mom and 9.2% yoy, more than twice the average pre-crisis level.

It’s worth discounting the fact that this is a February report and revisions, but still, after seeing job openings rise sharply in December and amid record-low unemployment benefits, the market still looks like it’s very hot. And that will give the hawks at the Fed new arguments to kick the growing pigeonhole army. The market, on this, of course, is depressed …

A little clarity. ​​The Fed took it away, the Ministry of Finance added

The Fed continued to reduce the portfolio this week, removing $38 billion of government bonds from the balance sheet at once, over the past 4 weeks the portfolio has decreased by $60 billion – everything is according to plan. The Fed is not getting steadily on mortgages, but this is already a familiar story. The US Treasury, on the contrary, added $ 72 billion to the system, raising bank liquidity by $ 30 billion. Local fluctuations will occur here, but the main process will not change: the US Treasury will borrow little, the Fed will continue to QT, but the overall supply of public debt will be low. At the same time, the budget will spend the cache, adding liquidity, and the Fed will withdraw it through QT. And there will be such a swamp until Yellen runs out of cash on her accounts and “emergency measures” and the debt ceiling is raised – then the situation can shake up.

The US Treasury has published plans for the first half of the year, it needs to borrow $1.3 trillion in the market to end the half-year with $0.55 trillion in cash on the balance sheet. But they estimate the actual financing needs at $0.6 trillion for the first half of the year – this is due to the fact that annual taxes are paid in the second quarter and there is virtually no budget deficit. In this regard, Yellen, of course, rather catches up with fears, saying that the money will last until June, in reality they are quite capable of holding out until September without raising the ceiling, if there are no emergency expenses.
Interest expenses on debt in the 4th quarter have already officially amounted to $0.85 trillion (in annual terms, or 3.3% of GDP) – increased by 42% YoY. Net interest expenses adjusted for Fed payments and interest income in annual terms increased to $0.82 trillion (3.1% of GDP), which is 77% higher than in the 4th quarter of last year. By the end of the year, we expect more than $1 trillion in interest on the debt, which is comparable to the records of the 80s and a big fight over the budget.

Looking back at the decisions of the Fed and the ECB (the Bank of England does not count – they initially rather pretend that they are struggling with something, even though the head of the Central Bank said that this is not the end of the increase), although the Central Bank itself did not show much softness – they showed complete uncertainty, and if they themselves are not in why are you not sure – why should the market believe them and their forecasts? Well, the market generally does not believe them, but I think the market overestimates the softness of the Central Bank and underestimates the risks of recession and inflation …
#USA # inflation #economy #Fed #debt # rates #dollar

What did Powell tell us? Powell: postpone until March

What did Powell tell us? Powell: postpone until March

The press conference of the head of the Fed turned out to be even more insipid than her press release. Perhaps its main motive is only one thing: to raise it by the expected 25 bp and sit out until the March meeting, and then we’ll see. This is exactly what the entire speech of J. was dedicated to.Powell. He repeated dozens of times everything that the market has already heard many times and which he does not really believe.

In fact, trying (which is typical for the Fed under Powell) to sit behind the locomotive, because they are not sure of anything and (apparently) are very afraid to make a mistake again. The peak of the bid – we do not know, maybe higher, maybe lower… how long – some time, where it will turn – we will go there.

Powell said a lot of “I think”, “I think”, as a rule, everything he says after these phrases means a little more than nothing – it showed up well in the first term, the crown “I think inflation is temporary”, because he doesn’t have much of his own expertise.

“Powell is talking hawkishly at every opportunity he can, using all the standard phrases, but the dollar scoffs at this admonishment.” – in this comment, the whole attitude of the market to the signals of the Fed. When the market sees fear (to make a mistake) and uncertainty, it always bends its line. By the way, this does not mean at all that the market is right in its expectations, but while it bends, it bends.

It is possible to understand the Fed, the second mistake in a row can cost not only the chair to Powell himself, but also bear the quite material risk of losing the formal independence of the Fed, which forces them to take an extremely cautious position, leaving the doors open in all directions. But the markets are taking a very specific position, which threatens volatility on the one hand, while reducing the effectiveness of the Fed’s policy on the other.

Anyway, the Fed has suspended the situation until the March meeting, when they will have to publish forecasts. The markets interpret this as weakness, driving the dollar rates down, and risk assets and gold up. It is not a fact that this fuse will last for a long time, the first good reports on the labor market, or bad ones on inflation will be nervously perceived.
#Fed #rate #inflation #USA

 

It is not a recommendation for action.

“Praemonitus, praemunitus”

@ESG_Stock_Market

Bulls on Chinese stocks are hoping for a 10 percent market pullback before the Lunar New Year 2023 to buy a fall: BofA survey

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Bulls on Chinese stocks 2023
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Bulls on Chinese stocks are hoping for a 10 percent market pullback before the Lunar New Year to buy a fall: BofA survey

According to a Bank of America survey, investment managers from Hong Kong fear a decline in Chinese stock prices after a sharp rise over the past two months. Some funds are counting on a rollback before the Lunar New Year next week.

“Given the good results, some investors hope to make a profit on the eve of the Lunar New Year,” according to a report dated January 18 by equity strategists at the American bank. They waited for a 5-10% drop before replenishing their positions on dips, as the report showed.

The answer came from a survey of 80 fund managers in the city who attended several meetings and presentations held by Bank of America this month,
as analysts at Wall Street stores including Goldman Sachs, Morgan Stanley and JPMorgan predicted bullish market forecasts based on China’s opening.

Despite the short-term worries, investors are still “unabashedly optimistic,” according to the survey, as China’s economic recovery leaves more room for growth. While the assessment of MSCI China members has expanded to a long—term average multiple of 12 times earnings, “we expect more growth given the cyclical upswing in 2023,” the bank’s strategists added.

About 84% of respondents have a “net long position and overweight” in China, while 78% expect further growth in Chinese markets by 10-20% by the end of this year. About 74% of them believe that China’s markets will not reach their peak before June or even later.

Most financial managers named the internet sector as their top choice, followed by consumers and healthcare. The study showed that most investors prefer stocks registered in Hong Kong or New York to stocks traded on local markets. Most of all, they are concerned about a weaker-than-expected recovery in consumption, geopolitical tensions and negative government policies.

“All key risks on the domestic front have dissipated, with optimism about easing geopolitical tensions in the region this year as well,” Bank of America strategists, including Ajay Singh Kapoor, said in a separate note to clients on Tuesday.

He added that policies aimed at Covid-19, private sector regulation, geopolitics, the credit cycle and property are “more conducive to high stock returns,” and clients do not need to worry that the rally in China could exhaust itself.

However, the powerful rally is starting to falter as the lunar New Year approaches. Some investors have reduced their assets, said Zhang Yidong, chief global investment strategist at Industrial Securities in Shanghai.

Online classroom giant Koolearn has Tripled its Revenue by Switching to Live Streaming e-commerce

China’s most famous online school chain has tripled its sales in six months, switching to selling food and agricultural products live after Beijing’s abrupt ban on commercial extracurricular education in 2021, which upended the multibillion-dollar industry.

Koolearn Technology Holding, a subsidiary of Beijing-based private tutoring giant New Oriental Education & Technology Group, on Tuesday reported revenue of 2.08 billion yuan (US$307 million) from June to November, up 260% from the same period in 2021.

✔️ According to the interim report of a company registered in Hong Kong, companies related to live e-commerce generated more than 85% of total revenue.

The results show that Koolearn has “successfully turned into an online business for e-commerce,” analysts at Shanghai-based research and consulting company SWS Research said in a note.

Koolearn currently has more than 35 million subscribers on six accounts of Douyin, TikTok’s Chinese sibling, which boasts more than 600 million daily active users.

According to the interim report, the company placed more than 70 million orders in the six months ended November 2022, for a total transaction amount of 4.8 billion yuan.

The share price of Koolearn fell by more than 8% and closed at 61.9 Hong Kong dollars on Wednesday, compared with about 4 Hong Kong dollars at the beginning of June last year and exceeded the level before the crackdown.


TAL Education Report released

Key events of the third quarter of fiscal year 2023:

⛔️ Revenue amounted to 232.7M$, compared with revenue of 1,020.9M$ in the same period of the previous year.

✅ The loss from operations amounted to 32.9M$, compared with a loss from operations of 108.4M$ in the same period of the previous year.

➡️ The loss per American depositary share amounted to $0.08

✅ The amount of cash, cash equivalents and short-term investments is $3,040.5M as of November 30, 2022, compared to $2,708.7M as of February 28, 2022.

Key events for the 9 months ended November 30, 2022:

⛔️ Revenue of $750,8M, compared to revenue of $3,849,8M in the same period of the previous year.

✅ The loss from operations amounted to 46.3M$, compared with a loss from operations of 615.2M$ in the same period of the previous year.

✅ Income from non-GAAP operations excluding share-based compensation expenses was $35.9M, compared to a non-GAAP loss from operations of $440.5M in the same period of the previous year.

The first reaction of the market is a slight drop.

Credit Suisse is cautiously optimistic as mainland investors support China’s opening and foreign funds are unsure

According to Credit Suisse, mainland Chinese investors support Beijing’s reopening plan, even if foreign investors seem unsure.

“The overall message this year is cautious optimism,” said John Woods, the Swiss bank’s chief investment officer for Asia Pacific.

China is the main market for the bank’s clients in the Asia-Pacific region, among them pharmaceuticals, tourism and the Internet sector. According to Credit Suisse, high-yield bonds and investment-grade loans are among the main investment topics of the bank in the first half of 2023.

However, foreign investors do not yet believe in the story of China’s discovery due to concerns about the impact of the rapidly growing number of cases of infection on the growth and profits of companies, Woods said. China reopened its border with Hong Kong and the world on January 8 after almost three years, lifting strict quarantine requirements.

“Despite the fact that there is no suitable scenario to effectively manage the Covid-19 outbreak, the opening of China was too chaotic,” Woods said. Credit Suisse believes that it will take at least one quarter to normalize business activity.

At the same time, China is the only major economy that will expand this year, and it will attract attention and an influx of investors, Woods said. Credit Suisse predicts that China’s economy will grow by 4.5% in 2023. This will be much more than in the US and Europe, whose economies will be hampered by a possible recession and higher inflation.

According to Woods, despite the fact that China’s reopening scheme will be an easy task for some investors, there will be problems along the way as authorities respond to spikes in infections and re-infections.

“The opening of China will have a positive impact on tourism, travel, hospitality and entertainment, which will create a positive halo effect in other parts of Asia,” he added.

“The reopening will mean that millions of tourists and visitors will be able to enter Hong Kong, which will have a positive impact on the city’s economy and corporate income,” Woods said, adding that investors are rallying for shares of large companies.

But Woods said the business movement between Hong Kong and Singapore has always been cyclical, and investors will eventually return. People can move to Singapore, but they often return, and the “fluctuations between the two centers” will continue.

According to him, Hong Kong “will remain the gateway to China’s markets.” “As long as the yuan remains non-convertible and Hong Kong has a convertible hard currency into the Hong Kong dollar, the city will have a very deep and secure future.”

@ESG_Stock_Market

Tesla stock technical analysis-early 2023

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Tesla stock technical analysis-early 2023
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Tesla stock technical analysis-early 2023. A breakout of Tesla to new lows, would bring the price below $100

$TSLA remains strongly bearish in the near term, and despite being oversold, it shows no signs of reaching a bottom.

Based on a combination of daily and weekly cycles as well as DeMark instruments, TSLA still has the potential to weaken to below $100 by the January earnings report before a stabilization and rebound occurs.

A few key takeaways.

– TSLA has lost over 60% in just the last three months after peaking around $313 on 9/20/222. Since mid-September 2022, TSLA has lost nearly 200 points, dropping to its lowest levels since the fall of 2020. Technical structure and momentum remain very negative

– The daily RSI reading is now oversold on the daily charts and is near levels that coincided with the historical bottom on the weekly charts. (February 2016 and May 2019) However, this does not guarantee a meaningful low

– DeMark tools such as TD Sequential and TD Combo- (trend exhaustion indicators) on weekly charts prematurely show the presence of a low and suggest the possibility of another 2-3 weeks of weakness to the low

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Catch me if you can disney plus. Can Disney+ catch up with Netflix and Amazon?

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Can Disney+ catch up with Netflix and Amazon
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Netflix and Amazon have long shared the streaming video pie from a global perspective, until Walt Disney launched its Disney+ service in November 2019. the streaming arm will reach people in more than 100 regions worldwide. But will it be enough to battle the VoD giants?

As the company’s data and Statista research show, Disney+ is likely to remain in fourth place for some time in terms of greatest reach. Although it has overtaken iQiyi in terms of subscribers thanks to continued but halted growth in 2021, the Chinese streaming service, founded in Beijing in 2010, is available almost everywhere in the world. On the other hand, the total number of VIP subscribers to Tencent’s Tencent Video and WeTV platforms exceeds the number of people subscribed to Disney’s streaming service, while the platforms are officially available in only 14 countries, mostly in Southeast Asia. According to the company, despite slowing growth, Walt Disney expects its streaming service to be available in 160 countries by 2023.

Subscription-based video-on-demand services have gone from being a trend to an economic mainstay, and many television networks and entertainment companies, such as HBO, NBC and AMC, are launching their own platforms with mixed success. According to Digital TV Research, VoD subscription revenue more than tripled between 2016 and 2020 and is expected to reach $126 billion in 2026, likely due to original programming and the continued need for consumers to diversify and pay for multiple subscriptions. to get their streaming fix.
#Disney $DIS
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The best pandemic stocks before the fall

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best pandemic stocks
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Global stocks are in a downward spiral and have experienced their worst week in more than a year.
Worries about slowing demand in the aftermath of the crisis and rising rates contributed to the sell-off.
Pandemic stocks suffered the most, with Shopify and Netflix down 35.3% and 33.5%, respectively.

The stock market, and in particular the stocks that thrived during the COVID-19 pandemic, are having a bad time in 2022. If you watch your investment accounts, you probably see a lot of red. Shaken by uncertainty about the pandemic recovery and future interest rate hikes, investors are selling off their stocks.

This market sell-off – which occurs when investors sell a large volume of securities in a short period of time, resulting in rapid price declines – is troubling for investors. In fact, search interest in the term “sell-off” recently peaked at 100. If Google Trends is to be believed.

Unconvincing pandemic stock returns

Pandemic stocks and technology-focused companies suffered the most. Here’s a more detailed look at individual stock returns for the year.

Netflix triggered a sell-off after it reported a disappointing increase in subscribers. The company added 8.28 million subscribers in the fourth quarter, down from the 8.5 million it added in the fourth quarter of 2020. The company also predicts slower year-over-year subscriber growth in the near future, citing competition from other streaming services . company .

Meanwhile, Coinbase stock has lost nearly a quarter of its value this year. As prices of cryptocurrencies such as bitcoin have plummeted, investors fear that Coinbase will see lower trading volume and therefore lower fees.

Infection has also spread to other pandemic stocks such as Zoom and DocuSign , as investors have begun to question the resilience of stocks staying home.

2022 is starting to paint a different picture

While investor exuberance drove many of these stocks higher last year, 2022 is starting to paint a different picture.

Investors are concerned that rising rates will negatively impact fast-growing stocks because it means it’s more expensive to borrow money. Not only that, they may also see Netflix’s rise as a harbinger of future events for other pandemic stocks.

Market cycle psychology also plays a role – among these fears, investors have adopted a herd mentality and started selling their stocks en masse.

#stocks
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