Markets Weekly December 14, 2024

Hello my friends, today is December 14th and this is Markets Weekly. So this week, another good weekend markets, we have the Nasdaq making you all time highs. Now going forward, we are heading into a seasonally very bullish period of time. This is great chart from Geiger Capital Substack. I believe he gets it from Scott Rupner of Goldman showing that over the past few decades, these last two weeks in December tend to be pretty positive. Now Jim Carssong who studies the options flows notes that this is because there's a lot of hedging activity due to long-rated options like leaps. But in any case, the data strongly suggests that we are heading into a bullish period and again, everyone already knows that. It doesn't mean we can't go down by the way.

你好，我的朋友们，今天是12月14日，这是《市场周报》。本周市场表现良好，纳斯达克创下历史新高。接下来，我们将进入一个季节性非常看涨的时期。这是来自Geiger Capital Substack的一张很棒的图表，据我所知，他从高盛的Scott Rupner那里得来。该图表显示，过去几十年中，12月的最后两周往往表现相当积极。研究期权流动的Jim Carssong指出，这是因为存在大量与长期期权（如LEAPs）相关的对冲活动。但无论如何，数据强烈表明，我们正步入一个看涨的时期，这一点大家都知道。不过，这并不意味着价格不会下跌。

All right, so today let's talk about three things. First, last week we got a whole bunch of central bank meetings and it looks like the global rate cutting cycle is accelerating. So let's talk about what happened with respect to central banks. Secondly, big news the past week on China. Looks like we're going to get more China stimulus. Again, I feel like we've seen this movie before, but it looks like the Politburo over there is becoming more serious. And lastly, let's go for some interesting research from the BIS about the relationship between interest rates and housing. Okay, starting with foreign central banks. So the past week we got rate cut news from three major central banks, the Swiss national bank, the European central bank and the bank of Canada.

好的，今天我们来谈谈三件事情。首先，上周我们看到了一系列的央行会议，看起来全球降息的步伐正在加快。所以我们先聊聊央行方面的情况。其次，上周关于中国的重大新闻。看起来中国将会推出更多刺激措施。虽然感觉这类似的情况以前见过，但看来那边的政治局态度变得更认真了。最后，我们来看一下国际清算银行(BIS)关于利率和住房之间关系的一些有趣研究。好，先从外国央行开始。上周我们得到了三大央行的降息消息，分别是瑞士国家银行、欧洲中央银行和加拿大银行。

Starting with the S&B. Now the S&B is different from many other central banks like the Fed. They like to surprise the market. So last week the S&B did indeed surprise the market. Everyone was expecting a 25 basis point cut, but the S&B gave a 50 basis point cut. Now when you're thinking about the Swiss national bank, it's important to realize that when you are thinking about these smaller countries, foreign exchange is a really big part of the transmission of monetary policy. Now for the Swiss, because there's been political turmoil in your land, a lot of money has been pouring into the Swiss and causing the Swiss to bring to appreciate.

从瑞士国家银行（S&B）开始。瑞士国家银行与美联储等许多其他中央银行不同，它们喜欢给市场带来惊喜。因此，上周瑞士国家银行确实让市场出乎意料。大家都预期会降息25个基点，但瑞士国家银行却降息了50个基点。当你考虑瑞士国家银行时，重要的是要明白，对于这些较小的国家来说，外汇是货币政策传导中的一个非常重要的部分。对于瑞士来说，由于你所在国家的政治动荡，大量资金流入瑞士，导致瑞士货币升值。

Now that's a big problem for the S&B because Switzerland obviously a small country, a very open economy. A lot of their GDP is through exports, selling watches, selling chocolates and so forth. And so when the Frank appreciates, that's bad for their businesses and it puts downward pressure on inflation, so deflationary pressures. Now the S&B is actually forecasting for inflation there to be around zero going forward. And more importantly, they noted that inflation could even become negative so they could have deflation. So they're not actually ruling out a return to negative interest rates. Again a lot of this is to manage the currency. Now the S&B can also deploy balance sheet measures in the past. They have actively, let's say sold the Frank and taking the proceeds to buy it say Apple stock or something like that. But they're not doing that so far so far it's still about interest rates.

这对瑞士央行（S&B）来说是个大问题，因为瑞士显然是一个小国，经济非常开放。他们的GDP很大部分是通过出口来实现的，比如卖手表、巧克力等等。因此，当瑞士法郎升值时，会对他们的企业不利，并给通胀施加下行压力，导致通缩压力。现在，瑞士央行实际上预测未来的通胀率将接近零。更重要的是，他们指出通胀甚至可能变为负值，因此可能出现通缩。因此，他们并没有排除重新实行负利率的可能性。这主要是为了管理货币。瑞士央行过去还可以通过调整资产负债表来干预市场，比如，他们曾积极出售法郎，并用所得资金购买苹果股票等。但目前为止，他们还没有这样做，现在仍然主要通过调整利率来应对。

So the S&B is one of the more interesting central banks in the world because they could really return to negative interest rates whereas I think when we look at the US, I don't think anyone thinks that we're going to go back to zero. Moving to Canada, now the Bank of Canada surprised them, well not so much surprised the markets but they did another 50 basis point cut, their second 50 basis point cut. So this again is about two things. Again looking at inflation, if you look at their measures of inflation, you can see that inflation is not a problem in Canada. Their measures of inflation are very much within their target range. But on the other hand, if you look at their unemployment numbers, it looks like it's jumping higher. Most recently unemployment rate went up to 6.8% and there seems to be a lot of excess capacity there.

瑞士中央银行（S&B）是全球较为有趣的中央银行之一，因为他们可能真的会重新实施负利率。相比之下，我认为在美国，没人认为利率会回到零。转到加拿大，现在加拿大银行让人们感到意外，虽然市场反应不是特别震惊，他们再次降息50个基点，这是他们第二次降息50个基点。这主要涉及两个方面。首先是通胀问题，如果你查看他们的通胀指标，就会发现通胀在加拿大并不是个问题。他们的通胀指标大致保持在目标范围内。但另一方面，失业率似乎在上升。最近，加拿大的失业率上升到了6.8%，这表明那里的生产能力过剩。

Now when you're looking at unemployment rate in Canada, it's really important to keep in mind that they've also had tremendous amounts of migration. So again, when you're thinking about the economy, it's not just what the central banks do but also what the government is doing. And if you import millions of people as much as 3% of your entire population in a single year, obviously you're going to get a lot more people looking for work and that increase in supply and labor is going to cause excess capacity in a higher unemployment rate.

当你查看加拿大的失业率时，非常重要的一点是要考虑到他们也经历了大量的移民。因此，当你思考经济问题时，不仅仅是中央银行的政策，同样政府的政策也很重要。如果在一年内引入相当于全国人口3%的上百万移民，很明显，会有更多的人寻找工作。这种劳动供应的增加将导致劳动力过剩，并使失业率上升。

And in fact, there's research from the Bank of Canada that shows that the jump in the unemployment rate is largely due to newcomers. So this interesting chart here shows that the unemployment rates for newcomers, that is people who entered Canada within the last five years, is notably higher than others. And it's been rising at a fast rate. So when you're a newcomer, oftentimes you have language difficulties, you have cultural difficulties and you just don't have as strong a professional network.

实际上，加拿大央行的一项研究表明，失业率的上升主要是因为新移民。这个有趣的图表显示，新移民（即过去五年内进入加拿大的人）的失业率明显高于其他人群，而且这一失业率正在快速上升。作为新移民，你往往会面临语言障碍、文化困难，并且你在职业网络方面也不够强大。

So very easy formula, increased population, hugely unemployment rate goes up and obviously the government does not like other central banks don't really distinguish between immigrants and native people. And so they have to pay attention to that and they're easing again and suggest that they're probably going to be more measured going forward when it comes to cuts. And last week, we also had the ECB again, cut rates. Now there were some whispers of a potential 50 basis point cut, but we just got 25 basis points.

非常简单的一个逻辑，人口增加导致失业率大幅上升，显然政府和其他中央银行一样，并不真正区分移民和本地人。因此，他们必须关注这个问题，并再次采取宽松政策，这表明他们在未来可能在降息方面会更加谨慎。上周，欧洲央行再次降息。虽然有一些传言说可能会降息50个基点，但实际只降了25个基点。

Now in addition to that, you can see from the ECB's forecast why they were, they're on a rate cutting cycle. So their forecast for inflation, revised lower and for growth, revised lower again. Now there's a lot of headwinds happening in Eurozone, especially ahead of potential tariffs, which the ECB also hinted at. Now Europe again is a lot of countries in Europe, like Germany export a lot of stuff. They have a big trade surplus with US and tariffs will be bad for their economy.

现在，除此之外，你可以从欧洲央行的预测中看到他们为什么处于降息周期。他们的通胀预测被下调了，经济增长的预测也再次被下调。现在欧元区面临很多阻力，尤其是在潜在关税出台之前，欧洲央行也暗示了这一点。欧洲有很多国家，比如德国，出口很多产品，他们与美国有很大的贸易顺差，而关税将对他们的经济不利。

On top of that, there is of course some degree of political disorder in France, as we've discussed in the past, and that all harms sentiment. Now the ECB seems to suggest that even though they did not have a 50 basis point cut on last week, they're going to continue to do 25s for the maybe next few meetings. Again, this could all change. But so far that seems to be what they're telegraphing. We got a whole bunch of centro-bank cuts the past week. And next week we have the Fed and the BOJ and we'll find out what they do pretty soon.

除此之外，正如我们之前讨论过的一样，法国目前存在一定程度的政治混乱，这对市场情绪造成了影响。欧洲央行似乎暗示尽管上周没有进行50个基点的降息，但他们可能会在接下来的几次会议中继续进行25个基点的降息。当然，这一计划仍有可能发生变化，但目前看来这是他们的意图。上周我们看到多个央行下调利率，而下周美联储和日本央行也将公布他们的政策，我们很快就会知道他们的决定。

Okay, the next thing that I want to talk about is what's happening in China. Now over the past few months, we've got we've seen this headline over and over again. Chinese authorities or the PBOC just jump out and talk about some kind of stimulus, right? So for context, China has not been doing well. Over the past few years, they've had a tremendous implosion in their property market and property is a big part of their economy. A lot of businesses build homes and sell to the public and the public likes hold homes as an investment. And it was all working really well when housing prices were going up, but they haven't been going up for some time. So households are facing a negative net worth impact.

好的，接下来我想谈谈中国正在发生的事情。在过去的几个月里，我们经常看到这样的头条新闻：中国当局或中国人民银行公开宣布某种形式的刺激措施。为了让大家更明白，这些措施的背景是中国最近几年经济状况不佳。尤其是房地产市场出现了巨大的崩溃，而房地产在中国经济中占据重要地位。许多企业建造房屋出售给公众，公众也喜欢持有房产作为一种投资方式。当房价持续上涨时，这种模式运作得很好，但房价已经有一段时间没有上涨了。因此，很多家庭的净资产受到了负面影响。

Again, they're feeling poor. And so there's less animal spirits and the businesses that are that borrowed to develop homes are underwater. So that's been a huge drag on the Chinese economy. And on top of that, again, China is a big export driven economy. And so some of their major exporting people that they export to, like the European Union, are not doing that well as well. So looking at say Chinese CPI, Chinese growth numbers, they've just not been good over the past few years.

再一次，人们感到经济困难。因此，市场的活力减弱，而那些贷款进行房地产开发的企业则陷入困境。这对中国经济造成了巨大的拖累。此外，中国是一个以出口为主导的经济体，而他们的一些主要出口对象，比如欧盟，经济状况也不佳。所以，如果看看中国的消费者物价指数（CPI）和经济增长数据，过去几年的表现都不太好。

Now as authorities try to jumpstart the Chinese economy, it doesn't seem to have been very effective. And now we all remember that, say in September, we had some noises of big stimulus. We had major US investors go on TV and say buy everything China. Well, if you look at their stock market, after that jump, it doesn't really seem to have gone anywhere. Now, the authorities seem to be becoming more and more concerned because heading into next year, we know that we are heading into a probably more contentious period in global trade or President Trump has promised to levy big tariffs on China. So again, the US is a country that has a lot of leverage because it is the largest consumer market in the world.

现在，当局试图重振中国经济，但效果似乎并不明显。我们都记得，比如在九月份，有关于大规模刺激计划的消息传出。主要的美国投资者曾在电视上建议“买入中国的一切”。不过，如果你看看他们的股市，经过那次上涨后，似乎并没有明显的进展。现在，当局似乎越来越担心，因为我们知道，进入明年后，全球贸易可能会变得更加紧张，尤其是特朗普总统承诺对中国征收高额关税。美国作为世界上最大的消费市场，因此在这方面拥有很大的影响力。

The US is the client and we are the client, you have leverage. So when President Trump makes angry noises to Mexico and Canada about enforcing their borders, the president of Mexico immediately tasks the military over there to reduce migrant flow through Mexico. And immediately there is less illegal migrants into the US. When President Trump makes similar noises to Canada, Governor Trudeau rushes to Marlago and then goes home and promises to enforce border security more strictly. So obviously the US has a lot of negotiating power. But when it comes to China though, again, China is a much bigger economy than Mexico and Canada. But also at the moment, it is also in a weaker state. And so when you're thinking about what China would do, it's not super clear. They could fold like other countries, but maybe they're not going to fold and maybe they're trying to put themselves in a better negotiating position.

美国是客户，我们也是客户，因此你有了筹码。所以当特朗普总统对墨西哥和加拿大发出愤怒的声音，要求他们加强边境管理时，墨西哥总统立刻命令军队减少通过墨西哥的移民流动，结果马上就有减少进入美国的非法移民。当特朗普总统对加拿大发出类似的指责时，加拿大总理特鲁多立即前往海湖庄园，然后回家承诺会更严格地执行边境安全。因此，很明显美国有很大的谈判力。但是，当涉及到中国时，情况有些不同。中国的经济比墨西哥和加拿大都大，但目前它的状态较为弱势。所以考虑中国的反应时，并不是很明朗。中国可能像其他国家一样屈服，但也有可能不会，他们或许会尝试让自己处于更有利的谈判位置。

So the new news the past week is twofold on the China stimulus fund. First the Politburo is noting that they're going to have monetary policy to be moderately loose. Now I'm not a PBOC or a Politburo watcher, but the people who specialize in this say that moderate lu-li-loose, this language is very, very strong. The last time we saw this was during the Great Financial Crisis over a decade ago. And so this suggests that the authorities over there are going to put stimulus on a level comparable to what was during the Great Financial Crisis. So that's big, big stimulus and that suggests, again, maybe things will get things will turn around, although we don't see that in their stock market yet.

所以，上周关于中国刺激基金的新消息有两方面。首先，政治局表示他们的货币政策将会适度宽松。虽然我不是央行或政治局的专家，但研究这些的专家认为“适度宽松”这一措辞非常强烈。上一次我们看到这样的措辞是在十多年前的全球金融危机期间。这表明那里的当局将实施与全球金融危机期间相当的刺激措施。因此，这意味着会有大规模的刺激政策出台，这可能表明情况会有所好转，尽管我们在他们的股市上还没有看到这种迹象。

The other thing is that they also suggested that they're willing to let the R&B depreciate to us much as 7.5. Now again, depreciating their currency, it's another tool to help stimulate their export growth, which is a big part of their economy. And they seem to be trying to bracing themselves for what could be further trade wars, suggesting that maybe this may be going forward, they're not just going to fold as easily as other countries. And so we could have some more contention next year. But in any case, these announcements have been coming for some time. We'll see if this one is more meaningful than the others.

另一件事是，他们表示愿意将人民币贬值到7.5的水平。贬值本币是刺激出口增长的另一种手段，而出口是其经济的重要部分。他们似乎在为可能进一步的贸易战做准备，这表明他们未来可能不会像其他国家那样轻易让步。因此，明年可能会有更多的摩擦。不管怎样，这类声明已经出现了一段时间。我们拭目以待这一声明是否比以往更加具有意义。

And the last thing that I want to talk about is this interesting study by the BIS on the elasticity of housing supply and this relationship with interest rates. So when you think about any commodity or product, you'd think that as prices go up, you'd have an increase in supply of that product or commodity and that increase in supply would put downward pressure on prices. Let's say the price of iron ore were to surge, you'd expect mining companies to build new mines. And when those mines come online, that increase in supply would put downward pressure on prices. Or let's say there's a huge demand for cars, then car companies would build new manufacturing plants. And when those manufacturing plants come online, that increase in supply would put downward pressure on auto prices.

我要讲的最后一件事是国际清算银行（BIS）关于住房供应弹性及其与利率关系的一项有趣研究。通常，当我们考虑任何商品或产品时，会认为价格上涨会导致该产品或商品的供应增加，而供应的增加又会对价格产生向下的压力。比如说，如果铁矿石价格飙升，大家会预期矿业公司会建造新的矿山。当这些矿山投产时，供应的增加会对价格产生向下压力。或者，如果汽车的需求量很大，那么汽车公司可能会建立新的制造厂。当这些制造厂投产时，供应的增加会对汽车价格产生向下压力。

Now the BIS is fighting that that's becoming less and less true when it comes to housing. In developed markets, housing has become less and less elastic over the past few decades, although in emerging markets, it's still pretty elastic. What that means is that when house prices go up, you don't actually get more of a supply. Now in the US, just looking at the US, that seems to be largely driven by heightened regulation. So a lot of building is about local zoning laws and local politics. Now looking at states like Texas where it's easier to build, you can see from this interesting post that in one month in the past, the number of homes permitted in the metro area of Dallas was greater than the number of homes permitted in the entire state of California, a state that is known to have very strict regulation.

现在，BIS正在努力应对这种情况，即在住房问题上情况正在发生变化。在发达市场，过去几十年里，住房市场的弹性越来越小，而在新兴市场则仍然比较有弹性。也就是说，当房价上涨时，住房供应并不会增加多少。在美国，这种情况主要是由较高的监管要求造成的。许多建筑活动受到当地分区法规和地方政治的影响。举例来说，在德克萨斯州这样的地方，建房相对容易一些。有一篇有趣的文章指出，过去某个月，达拉斯市区批准建造的住房数量超过了整个加利福尼亚州的批准数量，而加州以严格的监管而闻名。

So in some states, it's still very easy to build. And so over the past few years, you've had an increase in supply and that increase in supply has led to downward pressure on home prices and taxes. In other states, where it's known to be easy to build like Florida, but as a whole though, in the US, housing supply has to become less elastic to prices. And so you have this weird dynamic where when monetary policy goes up or down, you don't actually have too much of a supply and housing impact as you have a house price impact. So what the study finds is that because the supply of housing has to become less elastic in developed markets, when interest rates go down, you don't get more houses built. You just get higher home prices. And when interest rates go up, you just get lower home prices. So it doesn't seem to be a product unlike other products that's responsive to prices in terms of the actual supply.

在一些州，建房仍然非常容易。因此，过去几年中，住房供应有所增加，这种增加导致房价和税收的下降。在一些州，比如佛罗里达州，建房也相对容易。但总体来说，在美国，住房供应对价格的弹性变得较小。这就导致了一种奇怪的现象：当货币政策调整时，房屋供应并没有大的变化，而房价却受到显著影响。研究表明，由于发达市场中的住房供应弹性降低，当利率下降时，房屋建造数量并没有增加，只是房价上涨。而当利率上升时，房价则下降。与其他产品不同，住房的实际供应对价格变化并不敏感。

Now, another interesting point that this research makes is the impact of monetary policy on rents. Now, when we're talking about inflation, what makes it into the CPI is not home prices, but rents. Now looking at CPI index in the US, you notice that over the past couple years, a big driver of CPI inflation has been elevated shelter inflation. That has to say high rental growth. So whether or not rent, whether or not CPI gets back to 2%, a big part of that we'll have to do with whether or not rents come down or decelerate. So the interesting finding in this piece is that rents don't actually respond to monetary policy. So the Fed is hiking interest rates to try to slow down the economy. Ideally, of course, they get rents to decelerate. But their finding is that it doesn't really impact rental inflation. So that's a problem because as we can see from the CPI chart, rental inflation is a big part of CPI.

现在，这项研究提出的另一个有趣点是货币政策对租金的影响。在谈论通胀时，进入消费者价格指数（CPI）的不是房价，而是租金。观察美国的CPI指数，你会注意到在过去几年，CPI通胀的一个主要驱动因素是居住成本的上涨，也就是高租金增长。所以，不管CPI是否能回到2%，一个重要因素就是租金是否会下降或增速减缓。然而，这项研究中有趣的发现是，租金实际上并不对货币政策作出反应。美联储提高利率是为了减缓经济增长，理想情况下，他们当然希望租金增长能够减缓。然而，他们发现这并不会真正影响租金的通胀趋势。这是个问题，因为从CPI图表中可以看出，租金通胀是CPI的重要组成部分。

So there's another point there where monetary policy is not super impactful on the rural economy. If you wanted to get shelter inflation down, it seems like you would have to go through the government path, try to loosen zoning laws, increase the supply of homes, and maybe that would get shelter inflation lower. But monetary policy seems to be not very effective on that front. Okay. So that's all I prepared for today. This week, we have the Fed meeting. So I'll be back to the review on what happened at the December FOMC meeting. Again, the market is pricing in a 25-base-point cut. My sense, my best guess is that, of course, we'll get the 25-base-point cut and it would be a dovish meeting.

货币政策对农村经济的影响不大。如果想要降低住房通胀，似乎需要通过政府途径，例如放宽分区法规、增加住房供应，或许这样可以降低住房通胀。但在这方面，货币政策似乎并不太有效。好，这就是我今天准备的全部。这周我们有美联储会议，所以到时候我会回顾一下12月联邦公开市场委员会会议的情况。目前市场预期会有25个基点的降息。我个人的感觉和最好的猜测是，我们当然会看到25个基点的降息，并且这将是一次鸽派的会议。

All right. And if you're interested in hearing more of my thoughts, check out my blog, FedGuy.com. This week, I will write about why I am bearish for equity markets next year. All right. Talk to you all soon.

好的。如果你感兴趣想了解更多我的想法，可以访问我的博客，FedGuy.com。本周，我会写一篇文章讨论我为何对明年的股票市场持看跌观点。好的，期待很快再与你们交流。