Markets Weekly December 21, 2024

Hello my friends, today is December 21st and this is Markets Weekly. This past week was a really volatile weekend market. We saw some notable selling after the FOMC, though we did rebound a bit on Friday. As we've discussed before, these last two weeks of December are seasonally very positive. However, at the same time, Santa Paulo did put some coal in our stockings. Looks like the remaining days of the year are going to be a struggle between seasonally positive flows and higher interest rates. So let's see what happens. In any case, today let's talk about three things. First, let's take a look at what's happening in Brazil as it seems to be embroiled in a fiscal crisis and something like this should be a sign of things to come across the world.

你好，我的朋友们，今天是12月21日，这里是市场周报。上周末市场波动剧烈。虽然周五我们略有反弹，但在美联储会议后出现了一些显著的抛售。正如我们之前讨论过的，12月的最后两周通常是行情相对积极的时期。但与此同时，"圣诞老人"保罗给我们准备了一些“煤炭”，意味着形势并不全好。看起来今年剩下的几天将是季节性资金流入和高利率之间的较量。所以，让我们看看会发生什么。 无论如何，今天我们来谈三件事。首先，看看巴西的情况，该国似乎正陷入财政危机，这样的情况也可能是全球走势的一种预兆。

Secondly, now many people were expecting housing to rebound after the Fed began to cut rates but even after 100 basis point cuts of rates, we see mortgage rates still pretty elevated and housing market not doing so well. Let's listen to the earnings calls of two builders to try to figure out what's going on. And lastly, this past week we also got meetings from the BOJ and the Bank of England. Let's briefly review what happened over there. Okay, starting with Brazil. Now looking at this graph of the Brazilian Real over the past couple months, you notice that everything began to go south sometime in November when they unveiled their latest budget. Since then, the Brazilian Real has been depreciating gets a dollar in a big way.

其次，现在很多人预计在美联储开始降息后，房市将会回暖，但即便利率已经下调了100个基点，我们仍然看到房贷利率保持在较高水平，房市表现也不太理想。让我们听听两家建筑商的收益电话会议，试着弄清楚到底发生了什么。最后，过去一周我们还有日本央行（BOJ）和英格兰银行（Bank of England）的会议，让我们简单回顾一下那边的情况。好的，从巴西开始。现在看看这张巴西雷亚尔过去几个月的走势图，你会注意到一切在11月某个时候开始走下坡路，那时他们公布了最新的预算。自那时起，巴西雷亚尔对美元贬值得很厉害。

So what is it about the budget that spook markets? Well, it's taking a step back. It looks like President Lula over there has been learning from the magic money tree people and just spending a lot of money. The Brazil economy is doing okay. The unemployment rate is low, wages are rising. But at the same time, they're really spending a lot of money. Looking at this chart here, their fiscal deficit is about 10 percent, which of course is very high. In the US, we have a 6 percent fiscal deficit and that's way too high, 10 percent, much higher. Now typically what happens and we upgrade, government spending too much money is something we see over and over again throughout history. It's really super common and I would say inevitable for any group of elected people because at the end of the day, you're spending money that's not your own in order to benefit yourself and you're lobbyists.

那么，预算到底有什么让市场感到恐慌呢？简单来说，情况是这样的：看起来，那边的卢拉总统似乎在向"魔法钱树"派学习，只是不停地花钱。巴西的经济状况还算不错，失业率很低，工资在上涨。但与此同时，他们确实在大量支出。从这张图表来看，他们的财政赤字大约是10%，这显然是非常高的。相比之下，美国的财政赤字是6%，这已经很高了，而10%就更高了。通常发生的情况是，如果政府花的钱太多，这种现象在历史上反复出现。对任何一个群体的当选者来说，这几乎是不可避免的，因为说到底，你是在花不是自己的钱来让自己和游说者受益。

If you promise to spend more money, you can get elected and then you can spend money to support your donors and so forth and that's not your money. So who cares? So it's something that happens basically all the time. Now, the classic signs of a fiscal crisis are obviously first, your currency depreciates because you're the government, when it spends money doesn't have, it does so by printing debt. Now some people think of this as borrowing but I think of this as I think more accurately in the financial system as buying goods and services and paying with a newly printed debt, which is really just money that pays interest in a fiat system.

如果你承诺花更多的钱，你可以获得选举胜利，然后你可以用钱来支持你的捐助者等等，而这并不是你自己的钱。所以，谁在乎呢？这种情况几乎一直在发生。现在，财政危机的典型迹象显而易见，首先，你的货币贬值。因为当政府花没有的钱时，它是通过印制债务来实现的。有些人把这看作借款，但我认为更准确地说，在金融系统中，这就像是购买商品和服务，而支付方式是新印制的债务，这其实就是在法定货币体系中支付利息的钱。

And so when you do this in a big way, obviously your currency would depreciate. Now the corollary to this is of course when you're doing tremendous fiscal deficit spending, it's inflationary so you would see interest rates shoot up and oftentimes you'd also see the stock market sell off. Although in extremes of course, the stock market crashes up as we see in countries like Argentina. In any case, at the moment right now, we do see the Brazilian real depreciate significantly against the dollar. Now the central bank over there has been trying to stop this massive depreciation and they do this by offering dollar auctions. What they do is they sell dollars and buy real again selling dollars by real mechanically strengthens the real but that's not enough because they keep doing it. And again, this buy some temporary reparied but at the end of the day, it doesn't solve the root problem of too much fiscal spending and so the real just keeps selling off.

当你大规模进行这种操作时，很明显你的货币会贬值。相应地，当你进行大量财政赤字支出时，会导致通货膨胀，因此你会看到利率急剧上升，并且股票市场通常也会出现抛售。不过，在极端情况下，如在阿根廷等国家，股市反而会大幅上涨。目前，我们确实看到巴西雷亚尔对美元显著贬值。巴西的中央银行一直在试图阻止这种大规模贬值，他们通过提供美元拍卖来做到这一点。也就是说，他们出售美元并购买雷亚尔，这种操作在机械上加强了雷亚尔的价值，但这还不够，因为他们需要不断进行这种操作。这种方式能暂时缓解问题，但最终并没有解决财政支出过多的根本问题，因此雷亚尔仍持续贬值。

Now in line with the depreciating currency, looking at the local currency denominated government bonds over there, well they're yielding about 14% and obviously that's very high and so that does show a lot of concern about the fiscal situation. Looking at their stock market, these higher interest rates, this panic in the real has really seemingly led to some degree of capital flight where people are just selling everything and taking money out so their stock market has done very poorly. But the good news is of course their central bank is trying to do something not just offering dollar auctions but also hiking interest rates that are around 12% now. So it does seem like there is some degree of independent monetary policy at work trying to fix the problems. Now over the past few days, President Lula who recently was in brain surgery so he wasn't able to respond to this crisis is now coming out and saying more positive things, being more market positive, saying that he's going to try to rein in some of this fiscal spending and that's been getting some reparied in the market. So we'll have to see if he actually follows through with his pledges in order to restore some degree of financial stability. But this instant I think should sell familiar to people because not too long ago we were also talking about something similar on voting in France, of course not the same degree. As we all know, France is in some sort of a mini fiscal crisis as well where their fiscal deficit around 7% and with a government that doesn't seem to be able to change course.

现在，随着货币贬值，看看那边以当地货币计价的政府债券，它们的收益率大约是14%，这显然很高，这表明对财政状况有很大担忧。观察他们的股市，这些更高的利率以及对货币雷亚尔的恐慌似乎导致了一定程度的资本外流，人们纷纷抛售资产并撤资，因此他们的股市表现非常糟糕。但好消息是，他们的央行正在采取措施，不仅仅是提供美元拍卖，还提高利率，现在约为12%。因此，似乎有一定程度的自主货币政策在努力解决问题。在过去的几天里，卢拉总统刚做完脑部手术，所以无法立即对这场危机做出回应，但现在他开始发表更积极的言论，更加倾向于市场，表示他将努力控制一些财政支出，这在市场上得到了某种程度的积极回应。所以，我们需要观察他是否真的会兑现承诺，以恢复一定程度的金融稳定。但这个情形应该让人感到熟悉，因为不久前我们也在谈论法国的类似问题，当然情况不完全一样。众所周知，法国也面临某种小型财政危机，财政赤字约为7%，政府似乎无法改变现状。

Now we've already seen selloffs in French government bonds. The euro is really hard to say. Again, France is just one country out part of a much bigger union. But so most of the distress there seems to be reflected in their bond market. But this is a situation that we really see across the world. So deficits rising and seemingly the markets having less tolerance for it. Now one exception of course is the US. US is very lucky. It is the reserve currency. So even as the US spends too much money, even as interest rates rise, it oddly enough leads to more financial inflows and a stronger dollar. And of course that may not always be the case, but at the moment it is. So looking forward, let's be on a lookout for more types of fiscal crisis around the world because government spending too much. That is a tale as old as time.

现在我们已经看到法国政府债券出现抛售。欧元的情况说不清。然而，法国只是更大联盟中的一个国家。因此，那里大部分的困境似乎都反映在他们的债券市场中。但这种情况在全球都很常见。财政赤字上升，市场对其容忍度似乎在降低。当然，有一个例外是美国。美国非常幸运，它拥有储备货币的地位。所以即使美国开支过多，即使利率上升，奇怪的是这反而导致更多的资金流入和更强的美元。当然，这种情况可能并不会一直持续，但目前确实如此。展望未来，让我们密切关注全球范围内更多类似的财政危机，因为政府支出过多的情况可谓自古有之。

Okay, the second thing I want to talk about is the housing market. Now many people were thinking that finally after the Fed cut rates, we would have a rebound in housing. Now the Fed cut rates by 100 basis points, but mortgage rates are still around 67%. The reason for this is not because of the market is concerned about inflation, but because the market is less concerned about a recession and because the Fed has guided with more hawkish communication. So what's actually happened is that the market, let's say earlier in the year was pricing a lot of cuts for next year and then beyond, the right now is only pricing in two cuts next year. So the market is taking out Fed cuts out of the future because of course, Chair Powell did give a bit of a hawkish communication more recently, but also it seems like the economy in the US is doing okay.

好的，我想谈的第二件事是房地产市场。许多人本以为美联储降息后，房地产市场会反弹。美联储确实将利率下调了100个基点，但房贷利率仍在6-7%左右。这并不是因为市场担心通胀，而是因为市场对经济衰退的担忧减弱，同时美联储的沟通更为强硬。实际上，早些时候市场预计明年会有多次降息，但现在只预计明年会降息两次。市场正在减少对未来的降息预期，因为美联储主席鲍威尔最近发表了一些强硬言论，同时美国经济看起来也不错。

So there's really no need for the recessionary cuts that were priced in. And as a result, long period interest rates have been rising, mortgage rates with them. Now this has been having a really negative impact on the housing market. If you look at housing starts in the US, again, they surged in 2022 when interest rates were very low. And over the past year, they've been pretty coming down a lot. And so that suggests that housing is not doing as well as you'd think. Now so far looking at construction employment, you don't really see any layoffs construction employment remains strong, but if mortgage rates were to remain this high, you can easily see that you could have some problems for housing down the line.

所以实际上没有必要进行预期中的经济衰退削减。结果就是，长期利率正在上升，抵押贷款利率也是如此。这对房地产市场产生了非常负面的影响。如果你看看美国的住房开工情况，它们在2022年利率非常低的时候激增。然而，过去一年里，它们显著下降。这表明房地产市场表现不如想象中那么好。目前来看，建筑行业的就业情况没有出现裁员，建筑就业仍然强劲。但是，如果抵押贷款利率继续保持在这样的高位，未来房地产仍可能面临一些问题。

Now, in order to better understand what's going on, I listened to a couple earnings calls from large home builders. And surprisingly, well, not surprisingly, it kind of mirrors what we see in the broader economy. It is very much a case-shaped economy. Now first, let's listen to what Lenar has been doing. Lenar is one of the largest builders in the US, so they target the mass market. And for Lenar, their most recent earnings call is really downbeat. Now it looks like they missed their estimates by a large, large number of units, again, selling much fewer units than they thought. The profit margins also lower than they thought around 22%. And overall, they were basically sounding a pretty downbeat note. Now they suggested that, you know, the people have jobs, the wages are growing, everything is okay.

现在，为了更好地理解现状，我听了一些大型房屋建筑公司的财报电话会议。令人惊讶的是，或者不那么令人惊讶的是，这反映了我们在更广泛的经济中看到的现象。这确实是一个"K"型经济。首先，我们来听听Lenar公司的情况。Lenar是美国最大的建筑公司之一，他们主要面向大众市场。根据Lenar最近的财报电话会议，他们的表现非常低迷。看起来他们的销售数量大大低于预期，销售的单位数量远少于他们的预估。利润率也低于预期，大约只有22%。总体上，他们传达了一种相当悲观的情绪。然而，他们提到，虽然如此，人们仍有工作，工资也在增长，一切看起来都还可以。

But at the end of the day, house prices are high and mortgage rates are high. And so people haven't been able to afford the houses that they're building. They've been trying to move inventory by offering concessions. And that's been pushing out, pushing their profit margins down. So it was not a good quarter for them. And unless mortgage rates come down, it doesn't seem like it's going to improve. Now that is a pretty downbeat note. If you look at the price of housing stocks, looking at the ZTF, you'll see that the market kind of already reflects that. The home-builder ETF has totally tanked in recent weeks. However, let's listen to another home-builder, toll-brothers.

归根结底，房价和房贷利率都很高，因此人们买不起正在建造的房子。为了清库存，他们不得不提供优惠政策，这压低了他们的利润率。因此，这对他们来说不是一个好的季度。除非房贷利率下降，否则情况似乎不会改善。这确实是一个比较悲观的看法。如果查看住房股的价格，看看ETF市场，你会发现市场已经反映了这一点。房屋建筑商的ETF最近几周完全崩盘。然而，让我们听听另一家房屋建筑商Toll Brothers的情况。

Now toll-brothers also a large publicly traded home-builder, but not mass market. They tend to target the luxury market. So the average selling price for Lenar, about US$400,000. Now the average selling price for toll-brothers, about $900,000. So they do target a markedly more affluent consumer. And what toll-brothers are saying is that things have never been better. They had their best year ever. It's been a banner year. And their margins, again, much higher than Lenar, it's around $27.5.

现在，Toll Brothers也是一家大型的上市房屋建造商，但他们并不针对大众市场。它们往往瞄准奢侈品市场。因此，Lenar的平均销售价格大约是40万美元，而Toll Brothers的平均销售价格大约是90万美元。所以他们的目标客户明显更加富裕。Toll Brothers表示，他们的业绩从未如此出色，迎来了最好的一年，这是一个辉煌的年份。而他们的利润率也明显高于Lenar，约为27.5%。

And what they're saying is that, so yeah, mortgage rates are higher, but it doesn't really affect our home buyer. In fact, about a third of the people who buy homes from us, they're paying all cash, again, all cash on a $900,000 home. And the people who do have mortgages, they're putting down a pretty large down payment. So for them, they're noticing something pretty interesting. So the median first-time home buyer, according to data, is actually 38 years old. And that share of, so, median home buyer is around 38 years old. But overall in the markets, the share of the market, that is first-time home buyer, is historically at a multi-decade low.

他们在说的是，房贷利率确实更高了，但这对我们的购房者影响不大。事实上，大约三分之一的购房者是全款支付的，比如说，用全款来购买一套价值90万美元的房子。而那些申请贷款的购房者，也通常会支付一笔相当可观的首付款。因此，对于他们来说，有一点很有趣：根据数据显示，首次购房者的平均年龄其实是38岁。 然而，在整体市场中，首次购房者所占的比例却处于历史上几十年来的最低点。

So what that means for them is that when people do buy homes for the first time, because they're older, they tend to be more affluent and they are more able to afford these price or homes. Again, looking beyond the first home buyer market, a lot of the customers with home brothers are move up people, move up home buyers. So people on their second or third homes, now trying to upgrade and get a burger home. And these people obviously, older, more affluent, and they're finding it just fine to go and move on to these more luxury homes.

这段话的大意是，对于首次购房的人来说，由于他们年龄较大，通常经济条件比较宽裕，因此更有能力负担得起这些房子的价格。除此之外，不仅仅是首次购房者，许多房产公司的顾客是升级置业的人，也就是说购买第二套或第三套房子的人。这些人通常年纪更大，经济状况更好，所以他们能够轻松购买更豪华的房子。

And I would suggest that this is largely due to the asset price inflation we're seeing, whereas a certain segment of the population has been exposed to the equity market, decrypto, or whatnot, and they've been doing very well and they continue to convert their wealth into fancier housing. But for the vast majority of people, it seems like they really are struggling because they don't have as many assets, do not benefit from appreciation. So it really seems that the housing market is another reflection of the case-shaped recovery.

我认为这主要是由于我们看到的资产价格上涨导致的。那些参与股票市场、加密货币等投资的一部分人，表现得非常好，并且不断把他们的财富转化为更高档的住宅。但对于绝大多数人来说，似乎他们确实在苦苦挣扎，因为他们没有那么多资产，无法从升值中受益。所以，房地产市场似乎也是“K型复苏”的又一个反映。

An interesting implication of this is that if we do, for whatever reason, have some kind of recession, on the one hand, all these affluent buyers will have fewer stock market gains. On the other hand, it seems like mortgage rates will come down. I would expect that that would probably benefit the common builders more since their clients don't have that much assets to begin with, although they would have their jobs at risk potentially, depending on their occupation.

这段话的意思是，值得关注的是，如果我们因为某些原因遭遇经济衰退，一方面，那些富裕的买家在股市上的收益会减少。另一方面，房贷利率似乎会下降。我认为这可能对普通建筑商更有利，因为他们的客户本来就没有太多资产，尽管这些客户的工作可能会面临风险，这取决于他们的职业。

The last thing I want to talk about is what happened in central banking world the past week. So the past week, we have meetings from the Bank of Japan and the Bank of England. Now, in Japan, as we've been talking about, they've been discussing hiking rates. Japan is coming out of a multi-decade prong in deflation, so they don't want to hike routes too quickly and kill off inflation, which they've been praying for years and years and years. Now, this past week, they did not hike rates, and it was perceived to be more dovish because the central bank governor weighed over there, did not guide strongly for additional hike in January. So again, they were thinking, market was thinking, potentially a hike last week didn't happen.

最后，我想谈谈上周央行领域发生的事情。上周，日本央行和英格兰银行举行了会议。在日本，正如我们之前所说的，他们一直在讨论加息的问题。日本正从持续多年的通货紧缩局面中走出来，因此他们不希望过快地加息，从而抑制他们多年来一直期望的通货膨胀。上周，他们并没有加息，这被认为是较为温和的态度，因为日本央行行长对此没有明确指引将于一月份再次加息。因此，市场本来预计上周可能会加息，但最终没有成行。

Now the market would be thinking about January, but they also didn't receive strong guidance towards that as well. Now the market widely perceives that this is going to happen in January or March. It's going to happen eventually looking at the data. Inflation in Japan has been seemingly pretty stable around slightly above their 2% target. So it seems like the central bank there would feel more comfortable about hiking rates, although they did not. Now this past week, they also had a very interesting policy review come out, and the cliff notes from their over 200 page policy review seems to be that Governor Ueda would like to normalize policy.

现在市场可能在关注一月的情况，但他们也没有得到明确的指导。而市场普遍认为这可能会在一月或三月发生。根据数据显示，这迟早会发生。日本的通货膨胀似乎一直保持在略高于其2%目标的水平，因此看起来中央银行对此感到更放心，尽管他们还没有加息。上周，他们发布了一份非常有趣的政策评估，长达200多页的评估摘要显示，上田总裁希望将政策正常化。

He gives himself a big pat on the back for his unconventional policy stimulating the Japanese economy, but he would seemingly want to prefer to be able to normalize interest rates that is to say, get interest rates comfortably above zero so that in the future, when they have a downturn again, they can cut rates and ease policy through conventional measures rather than doing all this massive Kiwi in the bottom market in ETFs and so forth. But so far though, it doesn't seem like he's strongly signaling a rate hike, though the market really believes that he's going to hike very soon.

他为自己通过非常规政策刺激日本经济而感到自豪，但他似乎更希望能将利率正常化，也就是说，希望将利率提升到高于零的水平，以便在未来经济再次下滑时，可以通过常规措施降低利率和放松政策，而不是进行大规模的债券购买和购买ETF等。然而，到目前为止，他似乎并没有强烈暗示要加息，尽管市场确实相信他很快就会加息。

Now the reaction to the Bank of Japan's meeting was a pretty strong depreciation of the Japanese yen. Again, this is coming right after a Fed meeting that's perceived as hawkish. So together we had a massive, massive depreciation of the Japanese yen, double B.O.J. hawkish fed. So much so that on Friday, we actually got some verbal intervention from government officials in Japan, warning that they don't like seeing the yen depreciate disorderly and they could potentially intervene, which they've done a couple of times in recent years. So it seems like we are approaching that red line where the Japanese authorities don't like to see such a big disordered depreciation of the yen.

现在，日本央行会议的反应导致日元大幅贬值。紧接着，美联储的会议被视为鹰派，这两者共同导致日元出现了大幅度、大规模的贬值，表现为日本央行相对温和而美联储态度强硬。随后的周五，日本政府官员发表了一些言论干预，警告他们不喜欢看到日元无序贬值，并表示可能会进行干预——这种情况在近几年里已经发生过几次。看起来我们正在逼近日本当局所不能忍受的红线，他们不希望看到日元如此大幅度无序的贬值。

And of course, with President Trump waiting in the wings and he's been very vocal about not liking other countries to have the appearance of unfairly manipulating their currency, that's something to watch. It seems unlikely that Japan would be able to tolerate further depreciation of the yen. So maybe that will prompt the Bank of Japan to do something soon. Okay, the second thing that happened was of course the Bank of England meeting. Now the Bank of England did not cut rates, they were paused, but it was perceived to be somewhat of a dovish meeting because there were three people on the rate sending committee that actually dissented and wanted to cut.

当然，特朗普总统在幕后等待，而且他一直明确表示他不喜欢其他国家看起来在不公平地操纵他们的货币，因此这一点值得关注。日本似乎不太可能容忍日元进一步贬值，所以这可能会促使日本央行尽快采取行动。接下来要提到的第二件事是英格兰银行的会议。英格兰银行并没有降息，而是暂停了，但这次会议被认为是有些鸽派的，因为利率委员会中有三个人持不同意见并希望降息。

Now taking a step back, the market was kind of thinking that the Bank of England would be a bit hawkish because just before the meeting, the most recent inflation data was a bit hotter than expected and wage data had been hotter than expected. But it seems like the Bank of England is going to dismiss those data prints, especially the wage one, as just volatile data and once they continue to cut, it seems like they are becoming more concerned about growth, which was revised lower at the meeting than inflation. So the market is widely thinking that the Bank of England is going to cut a few times next year.

回顾一下，市场原本认为英格兰银行会采取强硬的立场，因为就在会议之前，最新的通胀数据和工资数据都高于预期。然而，英格兰银行似乎准备把这些数据，特别是工资数据，视为波动性因素而不予理会。他们继续降息，似乎表明他们对经济增长的担忧超过了对通胀的担忧，因为会议上对经济增长的预期被下调了。因此，市场普遍预期英格兰银行明年将多次降息。

Okay, so that's all I prepared for today. Thanks so much for tuning in. Next week I will put my markets outlook for 2025 and we'll go back to a regularly scheduled markets weekly the week after. All right, thanks for tuning in for this year. It's been a wonderful year and Merry Christmas to everyone.

好的，这就是我今天准备的全部内容。非常感谢您的收看。下周我将分享我对2025年市场的展望，之后的一周我们会恢复正常的每周市场更新。好的，非常感谢您今年的收看。今年真是美好的一年，祝大家圣诞快乐。