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What If The Chinese Economy Turns Negative in 2023, Hello China

Doom and gloom everywhere. Good news is bad news, and bad news is bad news.

What if the Chinese economy rallies in 2023 and drags US markets higher, catching everyone offsides?

A Christmas 🎄🧵

SPY SPX QQQ NASDAQ IWM BTC ETH CWEB MCHI KWEB

1) China pumping liquidity into the market …

CrossBorder Capital on Twitter

… committed in stabilizing their bond market by “asking” banks to buy bonds …

Sofia Horta e Costa on Twitter

… and there are no signs that it will stop anytime soon.

Sofia Horta e Costa on Twitter

Technical analysis of the Chinese Market is showing a significant break of a 2 year down-trend, with signs of life going into 2023 for the first time since 2020.

As I’ve been saying since March 2022, the Chinese market could be one of the most manipulated ever, that goes through a 3-year boom-to-bust cycle. We’re about to enter the boom part of the cycle.

Canton Cat 🐱 on Twitter

This liquidity is likely to trickle into Western Markets including the US, if it hasn’t done that already.

Sofia Horta e Costa on Twitter

Here’s proof that Chinese equity goes up, US equity also goes up.

I boxed the only area where MCHI went up and SPY went down, and it lasted only 1-2 months throughout the entire decade.

This time shouldn't be different.

Delisting fears for Chinese stocks from the US market is easing.

Sofia Horta e Costa on Twitter

Everyone’s scared of tightening conditions of liquidity in Europe and Japan but have neglected China, where inflation is not a concern.

Visualizing the 94 Trillion World Economy in One Chart

2) China reopening could normalize supply chains.

It would be important to not underestimate the impact of global supply and its impact with disinflation.

Canton Cat 🐱 on Twitter

We were flooded with cheap goods from China throughout 1980’s and 1990’s when Deng Xiaoping opened up China.

Once COVID constraints on supply chain normalizes, the world economy should be on the road of recovery.

Canton Cat 🐱 on Twitter

China is ripping the band-aid off and letting natural immunity take over. COVID restriction in China is going to be a thing of the past.

Sofia Horta e Costa on Twitter

They’re keeping their factories running …

Sofia Horta e Costa on Twitter

… including iPhone factories.

Sofia Horta e Costa on Twitter

For those worried China reopening causes inflationary pressures and driving the market down further, it’s nonsense. It’s going to drive demand up for numerous US companies exporting goods and services there. NKE AAPL TSLA WMT WYNN MGM

Teacher Dividend Investor 🇪🇺 on Twitter

For those doom and gloomers worried about the Fed, I may have another thread coming up to address that as well.

Bottom line is, no one knows what the market's going to do. It could go down a lot further, it may not.

Fundamentalists are often late to the game and get burned.

I'm not saying I'm right. I'm just trying to put in a different perspective.

Merry Christmas to all.

This post is based on this twitter thread.

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