Shipping container stuck at Largest port for 2 months!!

1. We are witnessing an interesting divergence between the new rise in covid cases and economic slowdown in the US and yet rising fuel prices. The Brent crude oil price has risen by 16% since 20 August to US$75.5/bbl and is up 46% year-to-date. This makes me wonder, as to what would happen to energy prices when the world really reopens and the inflation scares reappear strong and persistent.

2. Chinese markets always featured swing movements across sectoral bets. This was primarily due to the fomo mindset of the retail investors, who used to form a large share of the total investor base. But now since we institutions engulfed a large pie of the total float, we may see lesser volatile mid cap and small caps in China.

3. The supply chain disruptions are the next inflation debate. Is it persistent or only till the ports spring up to life? I think more overwhelming demand, this vacuum in the materials adds more oblivious pricing to things when they return to the market. This may stretch the pains for buyers and business folks.

4. The Chinese recovery story is stalled by the recent covid outbreak and economic numbers echo the same. China’s development pattern is beginning to look wearily familiar: weak consumption, strong exports and additional public investment to save the economy from past speculative excess. Whatever might be said for this growth dynamic, it is anything but new.

5. Cars need an immense amount of data to drive themselves, startups and tech mavericks are now looking at the heavens for some more data bandwidth. As was put by Ford CEO, 'Company’s future depends not on selling cars but on selling car owners a continuous stream of services, from hands-free driving technology to the latest touchscreen infotainment'.

6. Evergrande debacle led to worrisome debates on potential liquidity crisis across global markets. No signs of bail out added to the concern of further widespread collapse of the real estate sector. Chinese banks' loan books rely on such developers to the tune of 40%, implying that such credit defaults could proliferate into deeper scars in the high yield credit market.

7. Asset managers like BlackRock and HSBC, UBS, Ashemore, are the major investors in the offshore bonds of the group. Though they have risk limits and exposure control mechanisms, they still fear the pace at which the most highly indebted developer might fall flat to dust.

8. The pandemic emergency stimulus plans have lulled the FX markets to decade lows. The volumes and volatility have declined. This is because Central banks have always dwarfed any potential swings by intervening in the global FX markets. This also comes from the concurrence of near zero policy rates across markets. We see some interest in the AUD and NZD markets as those are the only markets nearing raising rates.

9. FOMC: The Fed opening statements were bold and clear, it signaled an obvious taper in the coming months. But the risk of the US Treasury defaulting on its debt is a headwind to all the tapering talk. The treasury will very very soon run out of cash and the house has not colluded on any replenishing plans.

10. The Wimbledon Club sold its centre court debentures at a whooping 46000 pounds each. These debentures guarantee a seat at the Centre Court finals for the next season. This happened as a result of the young British sensation, Emma, clinching the US Open title.

11. Interesting Charts: