Hang Seng Hits the 20,000‑Club—Trump’s Inauguration Isn’t the Main Driver
Contrary to the usual “breathe‑and‑wait” vibe as President Trump gets ready to step into the Oval Office, the Hang Seng Index has been closing higher for the sixth straight day, smashing past the 20,000 mark. Who knew the mainland’s chill would feel a bit like a desert heatwave?
Why the Market’s On a Joyride
- December’s industrial output and retail sales in China were stronger than the inbox predictions.
- Fourth‑quarter GDP rose 5.4% YoY—good news that feels like a fresh coffee brew on a sleepy Sunday.
- The rally didn’t ignite after last Friday’s good‑news data; it actually turbo‑charged after China’s CPI & PPI data revealed that deflation is still doing the heavy lifting.
In other words, even when the numbers look a bit gloomy, the market thinks “negative data equals more stimulus magic.” This is basically the same pattern we saw in the U.S. last year—where audiences mislabel “bad news” as “good news.” The expectation is that weaker economic data triggers higher stimulus, hinting at a possible “PBoC Put” (the Chinese equivalent of a “Fed stance shift”).
What’s Next? A Short‑Term Pause & Lots of Anticipation
Before we hit the climax, expect some short‑term consolidation. Investors are pulling back, waiting for a few critical pieces to fall into place:
- Trump’s tariff announcements are still in the works.
- The National People’s Congress meeting in March may bring new policy directions.
- Maybe a stimulus package aimed at growth and structural reforms will come to the floor.
Until then, the market will keep wiggling like a dancer in a heavy rain—balancing momentum against uncertainty.
2025: The Final Chapter of China’s 14th Five‑Year Plan
With 2025 being the year that wraps up China’s 14‑year plan, we can anticipate a surge in policy support. Keep an eye out on:
- High‑dividend stocks—they’re the butter‑nasty, dependable snacks.
- Industries that drive new productivity growth—think tech and green energy.
- Consumer sectors that might bounce back hard, especially if policies focus on boosting domestic circulation.
So strap in, stay curious, and remember: in the world of markets, every data point can either be the spark or the sparkler—depending on how you see it.
