👀 China's dubious "win"

China pulled off economic growth, after all | Europe said it'll be careful with the scissors | [Finimize](   TOGETHER WITH   Hi {NAME}, here's what you need to know for January 18th in 3:13 minutes.   ⚠️ You can spot winners like the best of 'em. But if you don't catch up on our [Uncover The Art Of Risk Management]( session and find out how to cover your downside, you're risking it all. Psst: [sign up for StashAway with this link]( and you can invest up to $50,000 Singaporean dollars (or equivalent) without a single fee. *The free management fee voucher applies to all StashAway portfolios except Simple, Simple Plus, and private market portfolios. Today's big stories - China expanded its economy by 5.2% during 2023, but economists believed that could’ve been a false start - This could be a good time to sell America’s tech stars – [Read Now]( - The European Central Bank suggested that rate cuts could come into effect this summer, but investors shouldn’t count on it Recipe For Depress [Recipe For Depress] What’s going on here? China’s [economy]( might’ve found a sprinkling of baking soda, but economists’ response was still flat as a pancake. What does this mean? China managed to pull its economy up 5.2% last year, beating the official target and the 3% uptick from the year before. But economists aren’t counting it as a redemption yet. China’s economy was 5% bigger than in 2022, sure, but that’s actually a fairly small increase from a year plagued by Covid lockdowns. In fact, it’s estimated that the country would have fared some 2% worse if 2022 had been a more regular year. Remember, too, that the struggling real estate industry is defying the government’s best supportive efforts. And with folk cutting back as their biggest assets lose value, the country’s witnessing its longest streak of deflation since 1999. To top it off, China has racked up debt worth 280% of its economy, an all-time high. Why should I care? The bigger picture: China needs an anti-aging serum. China’s population fell by around two million over the last year, a drop double the size as the one the year before. What’s worse, “small and mighty” doesn’t apply here: a third of the population is expected to be in the senior category within a decade, setting the country up for a smaller workforce, strained pension systems, and limited demand for houses fit to rear a family. For markets: Investing is a waiting game. Optimistic investors parked some cash in China during 2023, but nearly nine-tenths of it has already been pulled out. That said, Wall Street seems to be willing to wait it out: JPMorgan has forecast that the MSCI China index will have risen 18% by this December from the last, and Goldman Sachs’ targets look similar. So if you see potential in China’s more hardy sectors, like automation, robotics, and green technology, then you could see this slump as a January sale. You might also like: [The macro and markets guide to China](. Copy to share story: [( 🙋 [Ask a question](mailto:questions@finimize.com?body=Ask us a question: Where are you writing from? Let us know and we'll mention it when we reply.&noapp=true&subject=Recipe For Depress&utm_campaign=daily-global-18-01-2024&utm_source=email) Analyst Take Why It Could Be Time To Sell The Magnificent Seven [Why It Could Be Time To Sell The Magnificent Seven]( Just seven companies accounted for around two-thirds of the [S&P 500’s 24% rally]( in 2023. The [Magnificent Seven]( – Amazon, Apple, Tesla, Alphabet, Microsoft, Nvidia, and Meta – seemed to effortlessly deliver upticks between 50% and 240%, placing them among the market’s most profitable bets. But that came with a catch: more expensive valuations. The seven stocks now trade at an average forward price-to-earnings ratio of 44 times, more than double the S&P 500’s average, making them some of [the priciest stocks]( out there. In other words, it could be a lucrative time to put your shares back into the market. That’s today’s Insight: [why it may be time to sell the Magnificent Seven](. [Read or listen to the Insight here]( SPONSORED BY ISHARES Investors may be overlooking a potential opportunity As it stands, the market seems to believe the Federal Reserve is done with its interest rate hikes. iShares agrees with that. However, while some may expect [rate cuts]( to come thick and fast in 2024 iShares doubts that the first cut will come before the second half of the year. That matters: some believe that investments take off when rates drop, but historically, it’s the [time between the last hike and the first cut]( that can actually be the most rewarding for investors. So if you dove into cash like much of the world did this year, it may be time to consider [a foray back into markets](, according to iShares. But first, [discover what the macro insights from iShares could mean for bonds, stocks, and must-watch investment themes in 2024](. [Find Out More]( iCRMH1223U/M-3292428 When you support our sponsors, you support us. Thanks for that. Big Summer Hold-Out [Big Summer Hold-Out] What’s going on here? The European Central Bank (ECB) stressed that [summertime]( interest rate cuts are likely, but far from guaranteed. What does this mean? The ECB’s thick-and-fast rate hikes successfully made it more expensive for folk and companies to borrow money, making them more likely to save cash than spend it. The pro: with retailers making less cash from sales, they’ve been pushed to lower their prices, bringing down inflation. The con: those squashed sales mean European economies have suffered. So with inflation finally taking a breather, investors have been betting that the ECB will cut rates six whole times this year. That would bring them closer to their starting point and hopefully spark enough spending to spur on major economies. But on Wednesday, the ECB said that approach would be hasty: inflation gauges aren’t all in the sweet spot yet, making the results of any drastic moves too unpredictable to risk. Why should I care? For markets: Careful what you wish for. Ironically, though, investors’ expectations tend to be self-defeating. Interest rates and bond prices have an inverse relationship, with one rising when the other falls. So when investors start to bake their rate-cut predictions into their trades, bond prices rise. That lowers the interest rate attached to government bonds, the ones that set the price for major loans like mortgages. So suddenly, it’s cheaper for folk to borrow – and therefore, spend – money, all because of expectations, which makes actual central bank cuts less likely. The bigger picture: A broken clock is right twice a day. Mind you, big-picture predictions have a history of inaccuracy. For years, investors were predicting near-zero interest rates to be pulled up, only to be continually proven wrong. Then when rate hikes did happen, they played out a lot faster than self-proclaimed market psychics expected. So while they might be right about looming rate cuts, don’t count on anyone to nail the precise details. You might also like: [Here’s why the US economy has stayed so resilient](. Copy to share story: [( 🙋 [Ask a question](mailto:questions@finimize.com?body=Ask us a question: Where are you writing from? 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You want to keep your crypto secure. Check out the [pros and cons of different crypto wallets](.* 5. All publicity is good publicity. Lululemon’s founder is [taking that motto to its limits](. When you support our sponsors, you support us. Thanks for that. SPONSORED BY HEALTHWORDS.AI [HEALTHWORDS.AI]( When you support our sponsors, you support us. Thanks for that. 🌍 Finimize Live 🤩 Coming Up Soon... All events in UK time. ✨ [Finimize Ladies Investing Club](: 6.30pm, January 18th 📈 [Investing Beyond Stocks And Bonds](: 5pm, February 1st ❤️ Share with a friend Thanks for reading {NAME}. If you liked today's brief, we'd love for you to share it with a friend. You stay classy, {NAME} 😉 We’d love to hear your thoughts. [Give feedback]( Want to advertise with us too? 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