Strategy Note /
Global

Pivot To Growth

  • China's pivot to growth is single biggest positive for global growth and yet risk assets sell off on recession fears

  • Stale bearishness continue to dominate - focus forward people. China pro growth policy measures, Fed downshift ahead

  • Set Up for non US equity OP best in 20 years - flat SPY, weak USD, EM rate cutting cycle ahead, China pro growth shift

Jay Pelosky
Jay Pelosky

TPW Founder & Global Strategist

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TPW Advisory
9 December 2022
Published byTPW Advisory

The sense of stale bearishness we have written about recently is supported by the latest AAII investor sentiment survey which showed more bears than bulls for the 36th straight week – a record. Continued EU equity fund outflows as noted by BofA while European equity outperforms is another example (EU equity +19% QTD & back above Russian invasion levels).

 

Perhaps the latest & greatest example comes from the wrong headed media headlines noting weak China trade figures & concluding China is slowing. The real story, playing out in China stocks and global commodity prices ex energy, is that China is exiting Zero Covid months ahead of schedule. Rather than being stuck & under pressure as many media outlooks suggested President Xi recognized reality and moved fast. Even China bulls like GS didn’t expect this until the Spring.

 

China pivoting to growth is perhaps the single biggest positive for the global growth outlook one could ask for. And yet risk assets are selling off because of growing recession fears. C’mon people, focus forward!

 

We continue to see it differently from many.