Asian equities were a sea of red except for Hong Kong, which managed to end in the green.
Key News
Asian equities were a sea of red except for Hong Kong, which managed to end in the green.
President Trump’s tariff threat on China, Canada, and Mexico (if they don’t address drug and immigration) roiled Asia markets, and the Bessent nomination rally lasted a day.
Stepping up fentanyl ingredient export controls is an area in which the US and China are apt to find common ground, having done so previously, i.e., an easy win. By far the most important item today and arguably this month that you aren’t going to read anywhere else is the increase in Mainland chatter about major cities issuing consumer vouchers and the potential expansion of the trade-in policy beyond autos and home appliances. Consumer stocks such as tourism, restaurants, and liquor outperformed in both Mainland China and Hong Kong on reports major city governments issued consumer vouchers on Sunday to spur consumption during the holiday season. The focus of the vouchers varied by city. Shanghai’s vouchers were geared toward restaurants, hotels, and tourism sites. Meanwhile, Hangzhou and Guangzhou’s vouchers were for restaurants. Beijing, on the other hand, issued vouchers for winter sports and tourism.
The National People’s Congress (NPC) press conference insinuated that the trade-in policy will likely be expanded, with details potentially coming from the mid-December China Economic Work Conference (CEWC).
Last week, in Asia, a Chinese economist proposed that China should focus on addressing the structural issues that have led to a high savings rate, such as the lack of a social safety net and the inequalities facing the very large migrant worker population. Maybe they do both?
Real estate was a top-performing sector after the China Index Academy reported a strong uptick in transactions last week, up +11.75% month-over-month (MoM) and +6.26% year-over-year (YoY). First-tier cities gained +12.33% MoM and +32.09% YoY, and Shanghai gained +50.1% MoM. Separately, the Shenzhen Real Estate Agency Association announced that 2,132 second-hand homes were sold last week, up +8.
