Sigma Signals

Week of February 12, 2024

We have changed our China Signal from Yellow to Red. The Shanghai Composite stock index is down by about 50% over the last three years. Geopolitical Futures, a global forecasting service, recently wrote that “Beijing will have to address … a much more potent challenge that affects its long-term economic trajectory more than the others: a declining and aging population” (January 31, 2024; China Will Have to Manage the Silver Economy).  Economic/social conditions in China are infected by a generalized and pervasive pessimism.  Once again, this demonstrates that planned economies cannot compete with free(r) market economies. Is China the next Venezuela?

Bob Bilkie, CFA