Sigma Signals

Week of January 2, 2024

Happy New Year to all!  In a recent article from the Wall Street Journal, author Lingling Wei writes about China’s domestic struggles, “Home prices are falling, youth unemployment is at a record high, private investment is shrinking, the financial system is drowning in debt and deflation is setting in.” China has many problems to focus on domestically, so they cannot risk setting off fires in Taiwan and elsewhere abroad.  Xi Jinping’s recent meeting in San Francisco is a nod to China’s desperation to repair ties with the US. We have changed our Signal regarding China from red to yellow to account for China’s evolving circumstances.

Bob Bilkie, CFA and Michael Mullenax