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Stalling China Recovery Deals A Blow To European Stocks

Stalling China Recovery Deals A Blow To European Stocks

By Michael Msika, Bloomberg markets live reporter and strategist

With alarm bells…

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4 months ago

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Stalling China Recovery Deals A Blow To European Stocks

By Michael Msika, Bloomberg markets live reporter and strategist

With alarm bells sounding in various corners of China’s economy, European stocks with high exposure to its markets are counting on further policy support from Beijing to reinvigorate their gains. Trouble is, the prospects of major stimulus appear poor.

The rally in China-facing stocks has fizzled. Since the Lunar New Year holidays in late January, baskets of European shares with sizable income from the country have lagged behind the benchmark Stoxx 600. That gap widened on Wednesday after a surprisingly weak reading of manufacturing activity in the world’s second-largest economy. Today’s Caixin positive reading offered some modest relief, but suggests recovery remains uncertain and more evidence is needed to gauge the outlook.

This is a big deal for European large caps. The Euro Stoxx 50 generates one fourth of its revenue in Asia, according to Goldman Sachs strategists. For the broader Stoxx 600, the figure is 21%. To certain sectors, China is a vital source of demand — some miners and tech companies rely on it for as much as half their revenue. Among industrial, auto and luxury stocks the share is 15% to 30%.

Almost all the latest data points indicate that China’s economic comeback is sputtering. Industrial output, retail sales and fixed investment grew much slower than expected in April, housing market sales are regressing again, and demand for raw materials from copper to glass has been weak. The services sector has been a bright spot so far, but record-high youth unemployment begs the question of how sustainable that strength will be.

Tepid metals demand from China has helped entrench miners as the worst equity performers this year. But the malaise is spreading, with appliance maker SEB, insurer Prudential, elevator manufacturer Kone, industrial technology company OC Oerlikon, and luxury giants like LVMH and Burberry all taking a hit. Another wave of Covid infections has added to the selling momentum.

“We believe that China exposure baskets might keep disappointing,” say JPMorgan strategists led Mislav Matejka, citing the faltering recovery there as a key reason to downgrade euro-area stocks weeks ago. That message was echoed by Barclays strategist Emmanuel Cau, who recommends clients selectively reduce exposure to China.

Bets that luxury brands, airports and airlines will benefit from a return of Chinese customers come with risks. The number of outbound flights from China has stagnated at around 40% of pre-pandemic levels, with capacity to countries like Spain and France still low, according to Nomura economists led by Ting Lu. International travel is just too expensive for ordinary households, they say. 

Hopes for a return of China-inspired equity gains now hinge on a sweeping stimulus package from Beijing. But most strategists say that won’t come easily at a moment when the government is watchful about rising debt loads and stretched fiscal positions. For its part, China’s central bank has vowed to avoid major monetary easing in the wake of the turmoil in US regional banks crisis.

“We fear that the bar for fiscal support is relatively high,” says JPMorgan’s Matejka. Citigroup strategists led by Dirk Willer say China does need additional stimulus measures to prop up growth, and they may eventually come, but they are “far from imminent.”

Some are willing to look through the near-term hurdles. Morgan Stanley analysts say job gains will drive the next stage of a rebound in Chinese consumption. While the retail sales recovery has been bumpy, it should accelerate by the end of this year. Within the luxury sector, they prefer owners of brands with an ultra-premium position in China, such as LVMH and Richemont. They see spirits maker Pernod Ricard as another beneficiary.

China-exposed baskets also appeal to investors nervous about raising their direct bets on the country’s stocks when geopolitical tensions are high. “Some investors consider investing in China through European stocks as a lower risk way of doing that,” HSBC strategist Edward Stanford says in an interview. “One of the beauties of investing in China through Europe is you’ve got the reassurance of a European corporate infrastructure, disclosure and regulatory environment for listed investments.”

Tyler Durden Thu, 06/01/2023 - 10:15

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International

IceCure Medical’s (NASDAQ: ICCM) ProSense: A 96.8% Success Rate Revolutionizing Breast Cancer Treatment

On October 2nd, 2023, IceCure Medical (NASDAQ: ICCM) shares surged by over 50% following exciting news presented at a major medical event, the European…

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16 mins ago

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October 2, 2023

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On October 2nd, 2023, IceCure Medical (NASDAQ: ICCM) shares surged by over 50% following exciting news presented at a major medical event, the European Society of Breast Imaging. Their cutting-edge ProSense® System, designed for minimally invasive cryoablation, is marketed and sold worldwide for its cleared indications in the U.S., Europe, and China. More recently they gained approvals in India, and Brazil and have additional distribution through MC Medical to continue expanding in Europe. More importantly, the latest independent study confirms that the technology is a safe & effective outpatient procedure for breast cancer, with 96.8% success rate.

More Background:

Their system has the potential to revolutionize cancer treatment not only for breast cancer, but also for kidney, bone, and lung cancers. To date, the system is marketed and sold worldwide for the indications cleared and approved to date including in the U.S., Europe, and China.

During the event, Dr. Lucía Graña-López, a radiologist specializing in breast and women’s imaging, led an independent study. The study explored cryoablation as a viable alternative to surgery for early-stage breast cancer in patients who preferred a non-surgical route. The results were promising, suggesting that cryoablation could be a successful treatment option, particularly for patients hesitant about traditional surgery.

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Clinical Study:

The study involved 31 patients with early-stage breast cancer who opted out of surgery, and the outcomes showed that cryoablation was well-tolerated with no major complications. This alternative approach could potentially be a game-changer, especially for breast cancer, which is one of the most prevalent cancers globally. Many patients, particularly older individuals, are seeking less invasive alternatives to surgery, making cryoablation an appealing option.

Dr. Graña-López envisions cryoablation becoming a significant alternative to surgery, particularly for early-stage breast cancer in post-menopausal women. Moreover she believes this technology could reshape how we approach treatment in other indications, particularly for kidney, lung, and thyroid gland cancers.

These results from this independent study are are in line with the ongoing ICE3 study, the largest of its kind in the U.S., set to conclude in early 2024.

We will update you on ICCM when more details emerge, subscribe to Microcapdaily to follow along!

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Disclosure: We have not been compensated for this article/video. MicroCap Daily is not an investment advisor; this article/video does not provide investment advice. Always do your research, make your own investment decisions, or consult with your nearest financial advisor. This article/video is not a solicitation or recommendation to buy, sell, or hold securities. This article/video is our opinion, is meant for informational and educational purposes only, and does not provide investment advice. Past performance is not indicative of future performance.

Picture by marijana1 from Pixabay

The post IceCure Medical’s (NASDAQ: ICCM) ProSense: A 96.8% Success Rate Revolutionizing Breast Cancer Treatment first appeared on Micro Cap Daily.

The post IceCure Medical’s (NASDAQ: ICCM) ProSense: A 96.8% Success Rate Revolutionizing Breast Cancer Treatment appeared first on Micro Cap Daily.

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International

DAX – PMIs paint a bleak picture for manufacturing but China offers hope

Manufacturing remains in trouble China seeing some growth but unconvincing Bearish confirmation for DE30 index Manufacturing PMIs released throughout the…

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47 mins ago

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October 2, 2023

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  • Manufacturing remains in trouble
  • China seeing some growth but unconvincing
  • Bearish confirmation for DE30 index

Manufacturing PMIs released throughout the day have made for pretty miserable reading and even those in China barely registered any growth after a lengthy period of contraction.

The Chinese data did offer some cause for hope at least, despite ultimately barely sitting in growth territory. The trajectory is positive and boosted by targeted stimulus measures that are seemingly working. External demand remains a problem but a bump in domestic demand is promising.

The sector in Europe is looking particularly grim with demand remaining extremely weak, backlogs falling and layoffs expected to accelerate over the months ahead. That’s unless we can see a rebound in activity which is looking very unlikely at this stage with the global economy struggling for any positive momentum against the backdrop of high interest rates.

The PMIs from the US were a little better, particularly the ISM reading which significantly beat expectations but even here, it remains below 50 and therefore in contraction territory. With interest rates set to remain “higher for longer”, things aren’t likely to dramatically improve for the sector.

A very bearish signal for the DAX

The DE30 turned lower again today after staging a mild recovery in recent sessions and the move could reinforce bearish views on the index.

DE30 Daily

Source – OANDA on Trading View

The reason is that the move lower came after a retest of the 200/233-day simple moving average band, following the breakout last week. The rotation lower now could be viewed as confirmation of the breakout and therefore a bearish signal.

The next potential area of support could be seen around 15,000 where prior support and resistance falls around the bottom of the descending channel.

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Can An ‘Independent’ Kennedy Destroy “The Whole Left-Right Demon-Driven Pyschodrama”

Can An ‘Independent’ Kennedy Destroy "The Whole Left-Right Demon-Driven Pyschodrama"

Authored by James Howard Kunstler via Kunstler.com,

Three-Way?

“Intents…

Published

47 mins ago

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October 2, 2023

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Can An 'Independent' Kennedy Destroy "The Whole Left-Right Demon-Driven Pyschodrama"

Authored by James Howard Kunstler via Kunstler.com,

Three-Way?

“Intents have been overtaken by events.”

- Jacob Dreizin

You have to wonder what took Bobby Kennedy, Jr. so long to recognize that the Democratic Party was a home that he had long ago been turned out of, like a dog that has peed on the carpet too many times.

At the end of last week, Mr. Kennedy intimated that he might run for president on an independent line.

If he manages to get that line on the state ballots - and you can easily imagine New York and California trying to thwart him - it will change all the current calculations about the 2024 election.

As of right now, the Party of Chaos is living up to its name. They continue to present an obviously false and ridiculous consensus among themselves that “Joe Biden” is running for reelection. In fact, “the Big Guy” is about to get run through a wringer of the most abject public disgrace as his already-well-known crimes of bribery and treason get conscientiously laid out for all to see with cold and implacable decorum. Even the mind-fucked spawn of the Ivy League, toiling away on their CIA-owned newspapers and cable news networks, might find themselves forced to spin their narrative in a new direction.

“Joe Biden” is now a monumental embarrassment and a liability to our country, let alone to the degenerate party that owns him. Sub rosa efforts must be in motion to persuade him to resign before the impeachment inquiry spotlights all those telltale bank records, but they will fail to overcome his demented pride. He’ll ride this thing out to the bitter end, when he can use the last tool at his disposal to officially pardon everyone involved in his family’s racketeering operation. The longer the party pretends to support him, the closer the party itself skates toward self-destruction. Also consider: if allowed to play out, the impeachment inquiry will implicate the DOJ and the FBI in obstruction of justice — exposing many Deep State blob players to danger of prosecution.

Gov Gavin Newsom dangles himself above the fray as the deus ex machina who can touch down in DC and make all the Democrat’s problems go away. Such an attractive fellow! Great teeth and hair! Tall as a sequoia! And such a smooth talker! The woked-up suburban ladies who comprise the party’s main voting bloc grow moist in anticipation of Gov. Newsom landing on-stage like a demigod out of a Mozart opera.

But how do you think he’ll make out in an election when the airwaves are filled with oppo ads showing his toothy and hairy visage inset against scenes of homeless junkies and looting flash mobs? Try blaming that on climate change.

What else does he stand for? Censorship? Forced vaccinations? Child sex mutilations? Open borders? News-flash: these are increasingly unpopular, except among an easily-identified depraved elite.

Indeed, the whole Left-Right demon-driven psychodrama is proving impossible to live in as it throbs and pulsates toward something like civil war. And it has obscured the truly potent idea that the nation might actually be capable of solving its problems by facing up to them and changing how we act. That potent idea might be what voters will see in Bobby Kennedy if he can get their attention. Mr. Kennedy would dismantle the heinous partnerships between private corporations and the US government that loosed the Covid-19 op on the world and asset-strips the middle-class. He favors closing the border and a reevalution of immigration policy. He aims to negotiate an end to the ignoble Ukraine war project. He’s determined to disassemble the security state apparatus that’s destroying the US Constitution and citizens natural rights with it.

Mr. Kennedy says he can bring divided Americans together on these dire matters. It’s conceivable that his message might go over with enough rancor-weary voters to pull off a tour-de-force plurality in a three-way race, where nobody wins enough electoral votes to settle the contest, which then moves to the House, like in the old days of Jefferson and Burr. The rest is election mechanics, some of it very sinister when you consider all the election-rigging booby-traps already in-place such as mass mail-in ballot harvesting, no voter ID requirements, and the still-mysterious hookups of vote-counting machines to the Internet. But, at least, Mr. Kennedy running on an independent line will be a hard whap upside the Democratic Party’s thick skull, maybe even a death-blow to the party. They made a big mistake trying to un-person him. He’s on a hero’s journey at a moment in history when America dearly needs a hero.

*  *  *

Support his blog by visiting Jim’s Patreon Page

Tyler Durden Mon, 10/02/2023 - 16:20

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