Week Ahead & Corner of the FT!
“Week ahead” write-ups are not really my thing, but there are a few events I want to pay close attention to. I’m also adding a “Corner-of-the-FT” scribble towards the end. That’s my way of analysing a stupidly simple investment thesis.
China Policy Meetings, March 4 - March 12 (?):
China’s parliament and top advisory body will hold their annual meetings, collectively known as the “Two Sessions” (because there are actually 2 sessions: The Chinese People’s Political Consultative Conference (CPPCC) opens on March 4th and the National People’s Congress (NPC) opens on March 5th). This is a once-a-year event where lawmakers discuss policy. The end date hasn’t been released but expect 7-10 days.
The Politburo mentioned in their 29th Feb meeting the focus on "high-quality development and high-level security", “construction of a modern industrial system” and the development of “new productive forces”. We should expect a copy-paste of that.
The key unknown is the GDP growth target that they will present. The consensus is 5%, similar to last year. It seems Beijing is reluctant to launch a massive stimulus if growth is above 4.5%. So it’s really important to pay attention to this number.
Lastly, they’ll probably discuss Taiwan so don’t be shocked if FOGG re-emerges (“Fear-of-Getting-Gazpromed”).
What I will be paying attention will be the reaction in the commodity markets. Pick up any mining stock and it’s not pricing much a stimulus anyway. Glencore chart below. So maybe there’s a trade.
Biden’s State of the Union Speech - March 7th
For the non-Americans among you, the State of the Union speech is where the president reports on the state of the country and outlines his policy priorities for the coming year.
Bless him, I hope he pulls it through. I would appreciate if he mentioned the re-scheduling of Cannabis (MSOS), maybe the border control crisis (GEO) or frankly anything positive about my portfolio holdings.
And he’d better show gratitude and give special thanks to Tamagotchi Yellen for the economic miracle she pulled through.
Powell Speech before Congress - March 7th
Frankly, if I was Powell I’d be annoyed. He had the Tamagotchi Yellen hijack his monetary tightening plan and now he has to testify before Congress and explain why inflation is running hot.
On one hand, I think there’s every reason to expect him to sound hawkish.
On other hand, he just got lucky (again) because NYCB and RILY are about to blow up (again). Shrubstack readers should know by now, that a banking crisis is bullish as it allows Yellen to stuff the market with gazillions in long duration bonds.
So maybe he will appear balanced in his views. In any case, the monkeys won’t really care about Powell, UNLESS he puts hikes back on the table and I can’t see that, sorry.
MARVELL (MRVL) - Results March 7th
As I mentioned in the Nvidia piece last weekend, custom silicon will be a great opportunity going forward as AI algorithms move from training to inference and as more applications roll out. MRVL is the company that could be the big winner out of this trend with strong secular growth. They report results on March 7th.