The Saturday Hark Back - 09 Dec 2023
Capturing the themes of the week when there’s more time to digest them.
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The Hark Back
The key narratives that drove markets last week:
It is the season for trending, and last week saw a continuation of some of the core end of year 2023 trends
Softer EUR-XXX: ECB to lead the cutting cycle by March / April (they just haven't admitted too it yet), disinflation, weaker growth and German fiscal hole.
JPY acceleration as US10s rally to 4.2%, US economy slows from its Q3 peak and of course the year ahead pieces that expected BoJ to tighten got a boost from Ueda's comments
Crypto ETF euphoria - we're back!!!!!! $150k price targets permeate across FinTwit
Soft landing vibes have equities flying, wage gains, resilient labour market, lower inflation expectations... what's not to love? Homebuilders most certainly do… +27% since October lows....
Oil's slide off its September highs continues, and is now down 20%. There doesn't seem to be much OPEC can do if China imports less, Europe heads into a recession, EV caps its available market place ... demand destruction continues unabated.
Chinese stocks at multi year lows which leads to some key questions.
Is all the bad news now in the price?
Will we see a turnaround in the Chinese economy in 2024?