Chinese Economy Grew More Than 18% in First Quarter
Repost credit to A Couple Cents https://www.acouplecents.com/chinese-economy-grew-more-than-18-in-first-quarter/
Chinese Economy Grew More Than 18% in First Quarter
China’s economy saw massive growth in Q1, improving by 18.3% compared to the year-ago period, WSJreports.
The world’s second-largest economy nearly tripled the “6.5% year-over-year growth recorded in the final quarter of 2020, though it fell short of the 19.2% growth expected by economists polled by The Wall Street Journal.” It’s a promising sign for China, as the country lifts itself out of the Covid-19 induced downturn. But China’s recovery is not guaranteed — issues like inflation, lagging consumer spending, potential asset bubbles, unemployment and an unsteady geopolitical climate could all slow down growth and trade.
Justin Oh:
We all know that the data that comes out of China has a chance of being false, or at least inflated or exaggerated.
Regardless of the accuracy of the data, we can at least admit their growth numbers have been directionally right and their economy has grown by leaps and bounds.
I believe that China has a lot of growth and wealth expansion to come, and most of our international exposure on the Big Board is towards interesting Chinese stocks. I’d rather hold great Chinese stocks, even Alibaba ($BABA) or Tencent ($TCEHY) rather than buy some “emerging markets” ETF. Let’s just hope that Biden doesn’t ban Chinese ADRs…
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U.S. Economy Ramps Up on Spending Surge, Hiring Gains
“The U.S. economic recovery is accelerating as stimulus money, Covid-19 vaccinations and business re-openings spur a spring surge in consumer spending, a sharp pullback in layoffs and a bounceback in factory output,” WSJwrites.
Retail sales, or consumer spending, was up 9.8% in March, according to the Commerce Department. It proved to be the biggest monthly gain since May 2020, and it looks like stimulus funds were a driving factor. Jobless claims also dropped to 576,000 for last week, the lowest figure since March 2020. RSM Chief Economist Joseph Brusuelas said these numbers show “people going back to work, people seeing more income, people spending. This is a good story about the American economy’s resilience.”
Justin Oh:
From Morning Cents April 12, 2021:
I believe that corporate profits are set to beat expectations as the reopening happens and thus am generally bullish on the markets for at least the next month or so. But we’ve seen historical data show that the market usually corrects after economic indicators peak after a recession recovery too, so we should stay on our toes.
If you want to read our full notes and predictions on the markets, we just published new research reports for ROIC members here.
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Annual Covid-19 Vaccine Booster Shots Likely Needed, Pfizer CEO Says
Pfizer CEO Albert Bourla said people will probably need a Covid-19 booster shot within the first year, and annual vaccinations to stay ahead of the virus as it mutates, WSJreports.
Bourla’s comments were based on preliminary research that will require more data for confirmation. Researchers are still unclear how long protection lasts from any Covid-19 vaccine and the spread of variants could exacerbate the need for follow-up shots. Both Pfizer and Moderna have begun varying studies to determine solutions for fighting Covid-19 variants.
Justin Oh:
In my old video about Moderna in August 2020, I presented the thesis that Covid-19 will become an Endemic, just like the seasonal flu, where everyone will have to go in for annual vaccination shots.
This is looking like it will become true, and also the reason why the real profits for vaccine companies will come in years 2 and onward.
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Rivian To Initially Launch In-House Insurance Program In 40 States
“Electric truck startup Rivian released Thursday details of its in-house Rivian Insurance program, which it says will be integrated into its digital ordering process,” TechCrunch writes.
News of the program first broke around a year ago stemming from a job posting. Initially available in 40 states, customers will also have the option to insure their homes, boats, dirt bikes, campers and other recreational equipment. Rivian’s offering plans to stand out by delivering “tailored, data-driven coverage.”
Tesla also has a similar program in place (though it’s only available to Californians), with company-branded collision and service centers doing the work. “By keeping everything in-house, [Rivian] is likely thinking customers will be attracted to a seamless insurance program.”
Justin Oh:
I had to pay very expensive insurance rates on my Tesla Model X. I believe it’s because traditional automotive insurers don’t know how to model out the risks and costs of electric vehicles (EVs) yet since they are so new.
As a consumer, I am glad that Tesla and Rivian are launching their own insurance, and I predict that EV insurance rates will eventually normalize at a lower cost than internal combustion engine (ICE) rates.
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Autonomous-Truck Developer TuSimple Plans Driverless Road Test This Year
Autonomous driving company TuSimple Holdings raised $1.08 billion through an IPO Thursday, giving it a market cap of around $8.49 billion, WSJ reports.
TuSimple has more than 50 trucks in its U.S. fleet which it’s testing and about 20 more in China. The company plans to run tests without backup drivers on public roads in Arizona sometime in 2021. The stock opened at $40.25, dropped about 20%, but finished close to its original price.
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AppLovin Shares Fall 19% in Market Debut
AppLovin, which makes marketing and revenue tools for developers of smartphone apps, fell roughly 19% on its first day of trading, WSJ reports.
The company did, however, raise a notable $1.8 billion in its IPO, and with its stock closing at $65.20, AppLovin is valued at more than $25 billion. The company logged a $125.2 million loss on revenue of $1.45 billion in 2020 and posted a profit of $76.6 million from $994.1 million of revenue the year prior.
AppLovin also runs more than 200 of its own mobile-game apps, creating a synergistic relationship between both sides of its business. Coming changes to Apple to give users more control over how apps share data with third parties could be an advantage as AppLovin has a large stable of its own apps to glean insights.