China A Shares – Macro explains almost entirety of YTD returns
1. The silent shift that could hurt equities
2. KWEB vs. QQQ - time for a pause?
3. AUDNZD - bullish fundamentals but too far, too fast
Qi’s Risk Model attributes return & risk between macro vs. idiosyncratic / specific forces
The CSI 300is up +4.7% YTD. The make-up:
- +10.2% Macro
- -5.5% Idiosyncratic
The dominant macro propellers of that return:
- +3.8% Copper
- +1.2% USDCNH
- +1.0% China CDS
- +0.9% US HY Corporate Credit
- +0.6% China GDP
- +0.6% USD TWI
In others words, and perhaps no surprise, investing locally in China today is a punt on macro.
And nota bout a fundamental better opportunity set in anticipation of RoW fiscal stimulus / Deepseek news…
Currently the macro momentum has been strong, but be mindful of the macro risks if you are tempted to chase.
