{"id":2160,"date":"2024-02-12T14:42:03","date_gmt":"2024-02-12T18:42:03","guid":{"rendered":"https:\/\/wellspringwealth.com\/?p=2160"},"modified":"2024-02-12T14:42:03","modified_gmt":"2024-02-12T18:42:03","slug":"weekly-market-commentary-china-is-out-of-favor-with-investors","status":"publish","type":"post","link":"https:\/\/wellspringwealth.com\/2024\/02\/12\/weekly-market-commentary-china-is-out-of-favor-with-investors\/","title":{"rendered":"Weekly Market Commentary \u2013 China is out of favor with investors."},"content":{"rendered":"

The Markets<\/strong><\/span><\/p>\n

China is out of favor with investors.<\/p>\n

For decades, China was among the fastest-growing economies in the world. Its real gross domestic product, which is the value of all goods and services it produces,\u00a0grew by\u00a0about nine percent a year, on average,\u00a0from 1978 through 2022, according to The World Bank. However, the pace of economic growth in China slowed over the last decade and dropped sharply during the pandemic.<\/p>\n

Many investors expected China to rebound quickly in 2023 after its Zero Covid policy ended, but that hasn\u2019t happened. Instead, \u201cExports weakened and deflation deepened, but the big letdown was consumer spending, which slumped as young people struggled to find jobs and the long awaited reckoning for the housing market finally arrived,\u201d reported Allen Wan of Bloomberg<\/em>.<\/p>\n

China\u2019s stock market performance reflected its economic malaise. \u201cThe market value of China\u2019s and Hong Kong\u2019s shares is down by nearly $7 [trillion] since its peak in 2021. That is a fall of around 35%, even as [the market value] of America\u2019s stocks has risen by 14%, and India\u2019s by 60%,\u201d reported The Economist<\/em> via X.<\/p>\n

In recent months, investors have been pulling money out of China. \u201cMuch of that cash is now heading for India, with Wall Street giants\u2026endorsing the South Asian nation as the prime investment destination for the next decade. That momentum is triggering a gold rush\u2026The euphoria has made Indian equities among the most expensive in the world,\u201d reported Srinivasan Sivabalan, Chiranjivi Chakraborty, and Subhadip Sircar of Bloomberg<\/em>.<\/p>\n

The Chinese government has been trying to stimulate growth and reassure investors. In late January, \u201cthe People\u2019s Bank of China announced a larger-than-expected cut in banks\u2019 required reserve ratio\u2026But sentiment remains about as downbeat as can be, despite reports that authorities are considering a package to bolster the stock market totaling some two trillion yuan (almost $280 billion). That\u2019s not just among Chinese domestic investors\u2014that negativity is shared around the world,\u201d reported Randall Forsyth of Barron\u2019s<\/em>.<\/p>\n

In contrast, U.S. investors have been bullish. Last week, the Standard & Poor\u2019s 500 Index closed above 5,000 for the first time. The U.S. Treasury bond market remained relatively steady as yields on many maturities of Treasuries finished the week about where they started it.<\/p>\n\n\n\n\n\n\n\n\n
Data as of 2\/9\/24<\/strong><\/td>\n1-Week<\/strong><\/td>\nYTD<\/strong><\/td>\n1-Year<\/strong><\/td>\n3-Year<\/strong><\/td>\n5-Year<\/strong><\/td>\n10-Year<\/strong><\/td>\n<\/tr>\n
Standard & Poor’s 500 Index<\/td>\n1.4%<\/td>\n5.4%<\/td>\n23.2%<\/td>\n9.7%<\/td>\n13.2%<\/td>\n10.8%<\/td>\n<\/tr>\n
Dow Jones Global ex-U.S. Index<\/td>\n0.3<\/td>\n-1.2<\/td>\n3.2<\/td>\n-3.2<\/td>\n3.1<\/td>\n1.8<\/td>\n<\/tr>\n
10-year Treasury Note (yield only)<\/td>\n4.2<\/td>\nN\/A<\/td>\n3.7<\/td>\n1.2<\/td>\n2.7<\/td>\n2.7<\/td>\n<\/tr>\n
Gold (per ounce)<\/td>\n-0.5<\/td>\n-2.6<\/td>\n7.7<\/td>\n3.2<\/td>\n9.2<\/td>\n4.7<\/td>\n<\/tr>\n
Bloomberg Commodity Index<\/td>\n0.3<\/td>\n-1.7<\/td>\n-10.2<\/td>\n5.0<\/td>\n4.0<\/td>\n-2.8<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

S&P 500, Dow Jones Global ex-US, Gold, Bloomberg Commodity Index returns exclude reinvested dividends (gold does not pay a dividend) and the three-, five-, and 10-year returns are annualized; and the 10-year Treasury Note is simply the yield at the close of the day on each of the historical time periods. Sources: Yahoo! Finance; MarketWatch; djindexes.com; U.S. Treasury; London Bullion Market Association. Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly. N\/A means not applicable.\u00a0<\/strong><\/p>\n

HOW MUCH DOES A THUNDERSTORM COST? <\/strong><\/span><\/p>\n

The insurance industry has been examining this question closely. From 2000 to 2022, the median economic loss from severe convective storms (SCS, aka severe thunderstorms) around the world was about $39 billion, according to a report from a 2024 global professional services firm. In 2023:<\/p>\n