Welcome back, readers. I’m Phil Rosen. It’s good to see you.
Most headlines last week highlighted the tumult of the UK debt and currency markets — and that trend isn’t quite over, with the UK government this morning announcing a significant U-turn by scrapping plans to cut taxes for the highest earners just 10 days after announcing it.
However, there’s plenty to talk about beyond Britain’s borders as well.
Stateside, the jobs market is still chugging along, but Wall Street giants from Credit Suisse to Goldman Sachs have quietly moved to cut staff, as Insider correspondent Aaron Weinman writes.
But for today, I’m zeroing in on China — banks, currencies, and stocks, oh my!
And one programming note: I’ll be in Europe for a few weeks on a journalism fellowship starting today, so a few of my excellent colleagues will be filling in on Opening Bell until my return later this month.
Now let’s talk shop.
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REUTERS/Kim Kyung-Hoon
1. Hong Kong-listed Chinese stocks dropped to their lowest level ever last week as macro forces continue to batter global equities markets — but China is dealing with its own unique issues as well.
Through September, the Hang Seng Index tumbled 14% to its cheapest value on record, which also made it the worst-performing global stock index of the month.
While rate jitters and currency volatility are battering markets globally this year, China is dealing with unique issues in its property market, as well as navigating punishing COVID-19 lockdown policies. The International Monetary Fund has slashed its growth estimates for China twice this year, and warned of a 2023 recession.
Nonetheless, Beijing is gearing up for its twice-per-decade Communist Party gathering, which is set to begin this month, where party members are expected to extend President Xi Jinping’s rule to a third term.
Starting October 16, party members are set to discuss the next five years of policy for China and its role as a world player.
In the last week of September, the People’s Bank of China injected 868 billion yuan ($122 billion) into its banking system — an 843% increase from the prior week, likely in preparation for National Congress events.
But part of the lead-up, however, includes managing any potential market disruptions or political conflict.
The China Securities Regulatory Commission contacted several investment banks recently, including JPMorgan and Goldman Sachs, telling them to avoid publishing politically sensitive material before the summit, the Wall Street Journal reported Friday.
Separately, China is trying to prop up its currency, which is on track for its worst year since 1994. Reuters reported on Thursday that officials told state-run banks to get ready for a massive dollar dump and yuan buying spree.
Risks extend beyond the foreign exchange markets, though, according to legendary short-seller Jim Chanos. He told CNBC that investors are underestimating the severity of China’s real-estate crisis.
“If what is going on in the world — whether it’s Russia/Ukraine, whether it’s central banks losing control, whatever it might be — weren’t happening right now, I think what is happening in the Chinese real estate market would be front and center for investors,” he said at CNBC’s Delivering Alpha conference in New York last Wednesday.
“This is endemic to the whole economy there,” Chanos continued. “And I think that we ignore it at our own peril.”
How do you think China will navigate its economic challenges, and what comes next for the world’s second-largest economy? Email prosen@insider.com or tweet @philrosenn.
Ken Griffin shares his career advice with a group of 150 interns.
Citadel
2. Global stocks and US futures fall Monday, as Credit Suisse shares dropped nearly 8% in early trading as investors worried about a Lehman Brothers-style collapse. Meanwhile, the pound rose after the UK withdrew the plan to cut the top income-tax rate. Here are the latest market moves.
3. Earnings on deck: Frontier Lithium Inc, The Well Told Company Inc., and more, all reporting. Plus, look out for the ISM report on business manufacturing PMI, expected from the Institute for Supply Management later this morning.
4. Hedge fund titan Ken Griffin said a classic investing technique “looks much better today than at any point in recent times.” In his view, the consumer now is better positioned than six months ago. Griffin broke down why he’s optimistic about the trajectory of the US economy right now.
5. A $46 trillion wipeout in stocks and bonds won’t stop until central banks around the world launch a coordinated pivot. That’s according to Bank of America, and analysts pointed out that markets are panicking right now, but there’s ways to calm the waters. Get the full details here.
6. Wharton professor Jeremy Siegel said that predictions of a lost decade in the stock market are unfounded. “To try to time short-runs, even if you get out before the bottom, it’s getting back in that’s the hardest part,” he said. The famed commentator added that 6% annual returns are still a likely bet.
7. The 2022 bloodbath across markets has taken its toll on financial influencers. Social media “finfluencers” — along with market icons like Elon Musk and Cathie Wood — have either changed their tune or gone pretty much silent on the markets this year, and the void they’ve left is being filled by copious amounts of spam.
8. These three individuals and couples who paid off up to $460,000 in debt explained what strategies helped them get out of the red. “We were still living life and staying focused at the same time,” Alexis and Neiko Johnson told Insider. They shared how they made a budget that left room for discretionary spending.
9. This 39-year-old who owns 21 rental homes said he wished he knew certain things when he first started buying properties. Real estate can be lucrative, but there’s a lot of room to make costly mistakes, Tom Brickman explained. He broke down four obstacles that he hit and how he’s learned from them since then.
Markets Insider
10. Japan and Korea have dumped billions of dollars defending the yen and the won against the soaring dollar. Japan in September spent up to $19.35 billion to aid the yen in the first market intervention since 1998. The dollar has surged 26% against the currency. Meanwhile, the greenback has gained 21% against the won.
Keep up with the latest markets news throughout your day by checking out The Refresh from Insider, a dynamic audio news brief from the Insider newsroom. Listen here.
Curated by Phil Rosen in New York. (Feedback or tips? Email prosen@insider.com or tweet @philrosenn).
Edited by Max Adams (@maxradams) in New York and Hallam Bullock (@hallam_bullock) in London.