Contrarian Value Ideas

[fung_derf]

BTW, I had posted this on my board. I've been saying, I think Latin America is the place you want to have some money right now...

China vows to keep up spending in 2024 after stimulus cut:
China pledged to keep spending this year despite a property market slump weighing on key government revenue sources, raising hopes that fiscal expansion can provide more support for a slowing economy. Fiscal spending in 2024 will be maintained at a “necessary intensity,” Ministry of Finance officials said Thursday. Hours later, data showed that Beijing withdrew stimulus last year, with 2023’s overall deficit at 8.84 trillion yuan ($1.2 trillion). That was lower both in absolute terms and as a share of gross domestic product than the previous year, according to Bloomberg calculations based on official data. The more conservative fiscal stance reflects government concerns about debt, and expectations that consumer spending would drive demand for goods and services after the end of coronavirus restrictions. But economists have argued that weak government stimulus amid a property downturn was a key cause of sluggish demand and deflation. Bloomberg.com
BOE REACT: Cuts getting closer, first move likely in 2Q24:
OUR TAKE: The Bank of England is warming to the idea that it will likely be able to cut interest rates this year. A dissenting vote for a cut, softer guidance and a forecast that endorses the idea of multiple rate reductions in 2024, all support the view that the next move is likely to be down, it’s just a question of when. The Monetary Policy Committee held its benchmark rate at 5.25%, in line with our view and the consensus expectation. The vote split was 2-7-1 -- a significant shift from the 3-6-0 vote in December. Catherine Mann and Jonathan Haskel still favored tighter policy but Megan Greene joined the majority in voting for no move. We think Swati Dhingra’s decision to vote for a 25-basis-point cut is more significant. She cited the growing risk of overtightening. A look at past easing cycles indicates that, on average, it takes two more meetings before the majority sides with a dissenting vote for a cut. Bloomberg.com
Euro-area prices slow less than expected, clouding ECB cuts:
Euro-zone inflation eased less than anticipated at the start of the year -- testing investor expectations that the European Central Bank will begin lowering interest rates as soon as the spring. After a pick-up in December driven by base effects, consumer prices rose 2.8% from a year ago in January, Eurostat said Thursday. Core inflation, which omits volatile components such as food and energy, also abated less than envisaged, to 3.3%. The ECB predicts more disinflation this year, but at a much slower pace than in 2023, when price gains plummeted to as low as 2.4% in November. It still only expects to reach its goal in 2025. Bloomberg.com
Three Latin America Central Banks cut rates as Fed stays put:
Three of Latin America’s key economies plan to keep easing monetary policy after delivering another round of interest rate cuts on Wednesday, in sharp contrast with Federal Reserve signals that US borrowing costs may only fall after March. Brazil lowered the benchmark Selic rate by half a percentage point for the fifth straight time and promised to keep the same easing pace for the next two meetings at least. Chile delivered a jumbo cut of 100 basis points while Colombia lowered rates by a quarter-point, both of which were split votes with the minority backing faster easing. Latin American central banks are pulling away from their counterparts in advanced economies, reaping the benefits of early and aggressive monetary tightening campaigns in the wake of the pandemic. Bloomberg.com