Saturday, January 5, 2019
Weekly Commentary:
Global Markets’ Plumbing Problem
by Doug Noland
full column here:
My summary is below:
For the Week Ending
January 4, 2019:
STOCKS:
S&P500 gained 1.9% (up 1.0% y-t-d)
Dow Industrials rose 1.6% (up 0.5%)
S&P500 gained 1.9% (up 1.0% y-t-d)
Dow Industrials rose 1.6% (up 0.5%)
Dow Utilities slipped 0.2% (down 0.3%)
Dow Transports increased 1.3% (up 0.6%)
S&P 400 Midcaps gained 2.3% (up 1.3%)
Small cap Russell 2000 jumped 3.2% (up 2.4%)
Nasdaq100 rose 2.2% (up 1.5%)
Biotechs surged 6.8% (up 4.4%).
With bullion up $4,
the HUI gold stock index rose 2.6%
(up 1.1%)
U.K.'s FTSE rallied 1.5% (up 1.6% y-t-d).
Japan's Nikkei 225 dropped 2.3% (down 2.3% y-t-d).
France's CAC40 gained 1.2% (up 0.1% y-t-d).
The German DAX recovered 2.0% (up 2.0%).
Spain's IBEX 35 jumped 2.9% (up 2.3%).
Italy's FTSE MIB rose 2.8% (up 2.8%).
Brazil's Bovespa surged 4.5%
to all-time highs (up 4.5%),
Mexico's Bolsa gained 2.4% (up 2.0%).
South Korea's Kospi fell 1.5% (down 1.5%).
India's Sensex declined 1.1% (down 1.1%).
China's Shanghai increased 0.8% (up 0.8%).
Turkey's Istanbul National 100 dropped 1.8% (down 2.7%).
Russia's MICEX rose 2.0% (up 2.0%).
The German DAX recovered 2.0% (up 2.0%).
Spain's IBEX 35 jumped 2.9% (up 2.3%).
Italy's FTSE MIB rose 2.8% (up 2.8%).
Brazil's Bovespa surged 4.5%
to all-time highs (up 4.5%),
Mexico's Bolsa gained 2.4% (up 2.0%).
South Korea's Kospi fell 1.5% (down 1.5%).
India's Sensex declined 1.1% (down 1.1%).
China's Shanghai increased 0.8% (up 0.8%).
Turkey's Istanbul National 100 dropped 1.8% (down 2.7%).
Russia's MICEX rose 2.0% (up 2.0%).
US BONDS & MORTGAGES
Ten-year Treasury yields declined five bps to 2.67% (up 19bps).
Long bond yields fell four bps to 2.98% (up 17bps).
Benchmark Fannie Mae MBS yields dropped seven bps to 3.46% (up 42bps).
Long bond yields fell four bps to 2.98% (up 17bps).
Benchmark Fannie Mae MBS yields dropped seven bps to 3.46% (up 42bps).
Freddie Mac 30-year fixed mortgage rates fell four bps
to an eight-month low 4.51% (up 56bps y-o-y).
Fifteen-year rates declined two bps to 3.99% (up 61bps).
Five-year hybrid ARM rates dipped two bps to 3.98% (up 53bps).
Jumbo mortgage 30-yr fixed rates down four bps
to a ten-month low 4.38% (up 25bps).
to an eight-month low 4.51% (up 56bps y-o-y).
Fifteen-year rates declined two bps to 3.99% (up 61bps).
Five-year hybrid ARM rates dipped two bps to 3.98% (up 53bps).
Jumbo mortgage 30-yr fixed rates down four bps
to a ten-month low 4.38% (up 25bps).
Federal Reserve Credit
over the past year
contracted 8.6%.
over the past year
contracted 8.6%.
M2 (narrow) "money" supply gained 4.8%, over the past year.
Currency Watch:
The U.S. dollar index slipped 0.2% to 96.179 (unchanged y-t-d).
Commodities Watch:
Goldman Sachs Commodities Index rallied 3.2% (up 3.3% y-t-d).
Spot Gold added $4 to $1,285 (up 0.2%).
Silver jumped 2.3% to $15.786 (up 1.6%).
Crude recovered $2.63 to $47.96 (up 5.6%).
Gasoline gained 1.6% (up 3.5%)
Natural Gas sank 7.8% (up 3.5%).
Copper declined 1.3% (up 1%).
Wheat gained 1.1% (up 3%). Corn fell 1.5% (up 2%).
Spot Gold added $4 to $1,285 (up 0.2%).
Silver jumped 2.3% to $15.786 (up 1.6%).
Crude recovered $2.63 to $47.96 (up 5.6%).
Gasoline gained 1.6% (up 3.5%)
Natural Gas sank 7.8% (up 3.5%).
Copper declined 1.3% (up 1%).
Wheat gained 1.1% (up 3%). Corn fell 1.5% (up 2%).
2018 in Review:
December 30 – Financial Times (Don Weinland):
“A trade dispute with the US and a crackdown on shadow banking made China the world’s worst-performing major stock market in 2018, shedding some $2.3tn in value. Investors say that while China’s intensifying trade war with the US grabbed much of the attention, a government campaign against leverage in the financial system played a big role in slowing market demand and forcing some funds into liquidation. China’s benchmark CSI 300 index will finish the year close to 3,000, down more than 25% from where it started 2018…”
“A trade dispute with the US and a crackdown on shadow banking made China the world’s worst-performing major stock market in 2018, shedding some $2.3tn in value. Investors say that while China’s intensifying trade war with the US grabbed much of the attention, a government campaign against leverage in the financial system played a big role in slowing market demand and forcing some funds into liquidation. China’s benchmark CSI 300 index will finish the year close to 3,000, down more than 25% from where it started 2018…”
December 31 – Bloomberg (Christopher DeReza):
“U.S. investment-grade credit spreads are at the highest level in more than two years as the market nears the end of 2018 with the worst returns in a decade. High-grade bonds are returning -2.75% this year as of the start of the final trading day of 2018, which is the biggest loss since the asset class lost 4.94% in 2008, according to the Bloomberg Barclays U.S. corporate index… Investment-grade bond spreads held at 152 bps Friday.”
“U.S. investment-grade credit spreads are at the highest level in more than two years as the market nears the end of 2018 with the worst returns in a decade. High-grade bonds are returning -2.75% this year as of the start of the final trading day of 2018, which is the biggest loss since the asset class lost 4.94% in 2008, according to the Bloomberg Barclays U.S. corporate index… Investment-grade bond spreads held at 152 bps Friday.”
December 30 – Financial Times (Joe Rennison):
“Investors have withdrawn a record amount of cash from funds invested in junk-rated debt in 2018 as sentiment over the outlook for the economy has soured and oil prices plummeted. The total outflow from US high-yield bond funds is on track to exceed $60bn, according to… EPFR Global, double the amount withdrawn last year… It is also double the amount withdrawn in 2014, another period when oil prices fell sharply. Energy companies account for about 15% of the junk bonds outstanding, so the 20% fall in the oil price this year has damped investor appetite for the companies’ debt.”
“Investors have withdrawn a record amount of cash from funds invested in junk-rated debt in 2018 as sentiment over the outlook for the economy has soured and oil prices plummeted. The total outflow from US high-yield bond funds is on track to exceed $60bn, according to… EPFR Global, double the amount withdrawn last year… It is also double the amount withdrawn in 2014, another period when oil prices fell sharply. Energy companies account for about 15% of the junk bonds outstanding, so the 20% fall in the oil price this year has damped investor appetite for the companies’ debt.”
January 2 – Bloomberg (Kelsey Butler):
“There was no U.S. high-yield bond issuance last month for the first time in at least 10 years… There hasn’t been a December with no openly syndicated high-yield bond issuance in at least 12 years… December 2017 saw $19.9b in sales, up from $18.6b in the last month of 2016. There was $5.2b in volume during November 2018. High-yield issuance dropped 42.3% last year as rising rates and volatility made bond markets less attractive to issuers…”
“There was no U.S. high-yield bond issuance last month for the first time in at least 10 years… There hasn’t been a December with no openly syndicated high-yield bond issuance in at least 12 years… December 2017 saw $19.9b in sales, up from $18.6b in the last month of 2016. There was $5.2b in volume during November 2018. High-yield issuance dropped 42.3% last year as rising rates and volatility made bond markets less attractive to issuers…”
Market Dislocation Watch:
December 29 – Reuters (Rich Barbieri and David Goldman):
“The past two weeks on Wall Street have been epic. In the last 10 trading days, the Dow fell more than 350 points six times. There was also one day when the Dow rose by 1,000 points — the biggest point gain ever. The market is in an historic period of volatility. The S&P 500 was up or down more than 1% nine times in December and 64 times this year. In all of 2017, that happened only eight times.”
“The past two weeks on Wall Street have been epic. In the last 10 trading days, the Dow fell more than 350 points six times. There was also one day when the Dow rose by 1,000 points — the biggest point gain ever. The market is in an historic period of volatility. The S&P 500 was up or down more than 1% nine times in December and 64 times this year. In all of 2017, that happened only eight times.”
January 2 – Bloomberg (Lisa Lee):
“U.S. leveraged loans suffered their biggest loss in December since mid-2011, following record-breaking fund outflows. Despite this, the floating-rate asset class eked out a slim gain for 2018. Loans posted a 2.5% loss in December, the worst since August 2011… This followed a 0.9% drop in November and compared to a 2.1% loss for U.S. junk bonds last month… Still, loans held onto a rare gain in U.S. credit markets, rising 0.44% as high-yield bonds lost 2.1% and investment-grade bonds fell 2.5% for the year.”
“U.S. leveraged loans suffered their biggest loss in December since mid-2011, following record-breaking fund outflows. Despite this, the floating-rate asset class eked out a slim gain for 2018. Loans posted a 2.5% loss in December, the worst since August 2011… This followed a 0.9% drop in November and compared to a 2.1% loss for U.S. junk bonds last month… Still, loans held onto a rare gain in U.S. credit markets, rising 0.44% as high-yield bonds lost 2.1% and investment-grade bonds fell 2.5% for the year.”
Trump Administration Watch:
January 2 – CNBC (Fred Imbert):
“U.S. Trade Representative Robert Lighthizer has warned President Donald Trump that additional tariffs on Chinese imports may be needed to get meaningful concessions in trade negotiations… Lighthizer, who is taking the lead in trade negotiations with China, has told friends and associates he is intent on preventing Trump from accepting ‘empty promises’ like temporary increases in soybean purchases, the newspaper said. In order to avoid this, the U.S. may have to slap tariffs on more Chinese goods, Lighthizer reportedly said.”
“U.S. Trade Representative Robert Lighthizer has warned President Donald Trump that additional tariffs on Chinese imports may be needed to get meaningful concessions in trade negotiations… Lighthizer, who is taking the lead in trade negotiations with China, has told friends and associates he is intent on preventing Trump from accepting ‘empty promises’ like temporary increases in soybean purchases, the newspaper said. In order to avoid this, the U.S. may have to slap tariffs on more Chinese goods, Lighthizer reportedly said.”
December 31 – Wall Street Journal (Bob Davis):
“The U.S. is urging Beijing to fill in the details of a slew of trade and investment proposals Chinese officials have made recently, as the two sides try to resolve a trade battle that has rocked global markets. Since President Trump and Chinese President Xi Jinping met in Buenos Aires on Dec. 1, Beijing has pledged to cut tariffs, buy more U.S. goods and services, ease restrictions on foreign companies operating in China and further open sectors for foreign investment. But details have been scant. That has led to skepticism in the administration that the initiatives will lead to meaningful progress unless Beijing specifies the types of changes it will adopt, the schedule for implementing them and ways to enforce the pledges, said people tracking the talks.”
“The U.S. is urging Beijing to fill in the details of a slew of trade and investment proposals Chinese officials have made recently, as the two sides try to resolve a trade battle that has rocked global markets. Since President Trump and Chinese President Xi Jinping met in Buenos Aires on Dec. 1, Beijing has pledged to cut tariffs, buy more U.S. goods and services, ease restrictions on foreign companies operating in China and further open sectors for foreign investment. But details have been scant. That has led to skepticism in the administration that the initiatives will lead to meaningful progress unless Beijing specifies the types of changes it will adopt, the schedule for implementing them and ways to enforce the pledges, said people tracking the talks.”
U.S. Bubble Watch:
January 3 – Bloomberg (Jeff Kearns):
“A gauge of U.S. manufacturing plunged last month by the most since October 2008, a fresh sign of deceleration in the economy amid global strains across the sector. U.S. stocks extended declines and Treasury yields fell after the report. The Institute for Supply Management index dropped to a two-year low of 54.1, missing all estimates in Bloomberg’s survey… All five main components declined, led by new orders slumping the most in almost five years and the steepest slide for production since early 2012. Employment, delivery and inventory gauges fell, and ISM said just 11 of 18 industries reported growth in December, the fewest in two years. The index compiled from a survey of manufacturers has tumbled sharply from a 14-year high in August..."
“A gauge of U.S. manufacturing plunged last month by the most since October 2008, a fresh sign of deceleration in the economy amid global strains across the sector. U.S. stocks extended declines and Treasury yields fell after the report. The Institute for Supply Management index dropped to a two-year low of 54.1, missing all estimates in Bloomberg’s survey… All five main components declined, led by new orders slumping the most in almost five years and the steepest slide for production since early 2012. Employment, delivery and inventory gauges fell, and ISM said just 11 of 18 industries reported growth in December, the fewest in two years. The index compiled from a survey of manufacturers has tumbled sharply from a 14-year high in August..."
January 3 – CNBC (Jeff Cox):
“Contrary to growing concerns about a potentially slowing U.S. economy, job creation surged in December as measured by the latest ADP/Moody’s Analytics survey… Companies added 271,000 new positions as 2018 came to a close, smashing estimates of 178,000… It was the survey’s best month since February 2017, which saw a gain of 280,000, and brought the average monthly gain for last year to 206,000.”
December 29 – Wall Street Journal (Jared S. Hopkins):
“Pharmaceutical companies are ringing in the new year by raising the price of hundreds of drugs, with Allergan PLC setting the pace with increases of nearly 10% on more than two dozen products… Many companies’ increases are relatively modest this year, amid growing public and political pressure on the industry over prices. Yet a few are particularly high, including on some generics, the cheaper alternative to branded accounting for nine out of 10 prescriptions filled in the U.S. Overall, price increases, including recently restored price increases from Pfizer Inc. continue to exceed inflation.”
“Pharmaceutical companies are ringing in the new year by raising the price of hundreds of drugs, with Allergan PLC setting the pace with increases of nearly 10% on more than two dozen products… Many companies’ increases are relatively modest this year, amid growing public and political pressure on the industry over prices. Yet a few are particularly high, including on some generics, the cheaper alternative to branded accounting for nine out of 10 prescriptions filled in the U.S. Overall, price increases, including recently restored price increases from Pfizer Inc. continue to exceed inflation.”
January 4 – Bloomberg (Mark Chediak and Margot Habiby):
“PG&E Corp. is considering filing for bankruptcy protection within weeks as a way of organizing billions of dollars in potential liabilities tied to deadly wildfires that ravaged parts of California in 2017 and 2018, according to people familiar with the situation. The California utility giant may decide to file by February, said the people… A bankruptcy filing isn’t certain and is one of a number of steps being considered… PG&E said in a statement that it’s ‘working diligently to assess the company’s potential liabilities as a result of the wildfires and the options for addressing those liabilities.’ …The stock slid as much as 32% in after-hours trading.”
“PG&E Corp. is considering filing for bankruptcy protection within weeks as a way of organizing billions of dollars in potential liabilities tied to deadly wildfires that ravaged parts of California in 2017 and 2018, according to people familiar with the situation. The California utility giant may decide to file by February, said the people… A bankruptcy filing isn’t certain and is one of a number of steps being considered… PG&E said in a statement that it’s ‘working diligently to assess the company’s potential liabilities as a result of the wildfires and the options for addressing those liabilities.’ …The stock slid as much as 32% in after-hours trading.”
January 2 – Wall Street Journal (Bradley Olson, Rebecca Elliott and Christopher M. Matthews): “Thousands of shale wells drilled in the last five years are pumping less oil and gas than their owners forecast to investors, raising questions about the strength and profitability of the fracking boom that turned the U.S. into an oil superpower. The Wall Street Journal compared the well-productivity estimates that top shale-oil companies gave investors to projections from third parties about how much oil and gas the wells are now on track to pump over their lives, based on public data of how they have performed to date. Two-thirds of projections made by the fracking companies between 2014 and 2017 in America’s four hottest drilling regions appear to have been overly optimistic, according to the analysis of some 16,000 wells operated by 29 of the biggest producers in oil basins in Texas and North Dakota.”
January 3 – Bloomberg (Justina Vasquez):
“Manhattan home prices fell in the fourth quarter, with the median slipping to less than $1 million for the first time in three years, as ample inventory continued to allow buyers to demand sweeter deals. Condo and co-op prices declined to $999,000 in the three months through December, a drop of 5.8% from a year earlier, appraiser Miller Samuel Inc. and brokerage Douglas Elliman Real Estate said... Many apartments were sold for less than sellers originally sought, with an average discount of 6.2% from the last list price. That’s up from price cuts of 5.4% a year earlier.”
“Manhattan home prices fell in the fourth quarter, with the median slipping to less than $1 million for the first time in three years, as ample inventory continued to allow buyers to demand sweeter deals. Condo and co-op prices declined to $999,000 in the three months through December, a drop of 5.8% from a year earlier, appraiser Miller Samuel Inc. and brokerage Douglas Elliman Real Estate said... Many apartments were sold for less than sellers originally sought, with an average discount of 6.2% from the last list price. That’s up from price cuts of 5.4% a year earlier.”
China Watch:
January 2 – Reuters (Stella Qiu and Ryan Woo):
“China’s factory activity contracted for the first time in 19 months in December as domestic and export orders continued to weaken, a private survey showed, pointing to a rocky start for the world’s second-largest economy in 2019… The Caixin/Markit Manufacturing Purchasing Managers’ Index (PMI) for December… fell to 49.7 from 50.2 in November, marking the first contraction since May 2017.”
“China’s factory activity contracted for the first time in 19 months in December as domestic and export orders continued to weaken, a private survey showed, pointing to a rocky start for the world’s second-largest economy in 2019… The Caixin/Markit Manufacturing Purchasing Managers’ Index (PMI) for December… fell to 49.7 from 50.2 in November, marking the first contraction since May 2017.”
January 2 – Bloomberg:
“China will cut the reserve requirement ratio and improve funding conditions this month, as liquidity tightens toward the Spring Festival holidays, the country’s largest securities firm says. Fresh demand for funds will amount to nearly 4.3 trillion yuan ($625 billion) in January, according to Citic Securities… Mainland residents will withdraw 1 trillion yuan of cash in preparation for the holiday, when money is gifted in red envelopes. Corporate tax payments and maturities of lenders’ interbank debt will also mop up liquidity, prompting authorities to step up cash injections.”
“China will cut the reserve requirement ratio and improve funding conditions this month, as liquidity tightens toward the Spring Festival holidays, the country’s largest securities firm says. Fresh demand for funds will amount to nearly 4.3 trillion yuan ($625 billion) in January, according to Citic Securities… Mainland residents will withdraw 1 trillion yuan of cash in preparation for the holiday, when money is gifted in red envelopes. Corporate tax payments and maturities of lenders’ interbank debt will also mop up liquidity, prompting authorities to step up cash injections.”
Emerging Markets Watch:
December 31 – Reuters (Anthony Boadle):
“Brazil’s newly inaugurated President Jair Bolsonaro said… his election had freed the country from ‘socialism and political correctness,’ and he vowed to tackle corruption, crime and economic mismanagement in Latin America’s largest nation. Bolsonaro, a former army captain turned lawmaker who openly admires Brazil’s 1964-1985 military dictatorship, promised in his first remarks as president to adhere to democratic norms, after his tirades against the media and political opponents had stirred unease.”
“Brazil’s newly inaugurated President Jair Bolsonaro said… his election had freed the country from ‘socialism and political correctness,’ and he vowed to tackle corruption, crime and economic mismanagement in Latin America’s largest nation. Bolsonaro, a former army captain turned lawmaker who openly admires Brazil’s 1964-1985 military dictatorship, promised in his first remarks as president to adhere to democratic norms, after his tirades against the media and political opponents had stirred unease.”
Global Bubble Watch:
January 1 – Reuters (Jonathan Cable and Marius Zaharia):
“Factory activity weakened across much of Europe and Asia in December as the U.S.-China trade war and a slowdown in demand hit production in many economies, offering little reason for optimism as the new year begins. A series of purchasing managers’ indexes for December… mostly showed declines or slowdowns in manufacturing activity across the globe.”
“Factory activity weakened across much of Europe and Asia in December as the U.S.-China trade war and a slowdown in demand hit production in many economies, offering little reason for optimism as the new year begins. A series of purchasing managers’ indexes for December… mostly showed declines or slowdowns in manufacturing activity across the globe.”
December 31 – Reuters (Sujata Rao, Ritvik Carvalho):
“U.S. companies have sent home over half a trillion dollars of cash they held overseas in 2018 to take advantage of tax changes, but data suggest the pace is slowing, potentially removing a key source of support for Wall Street. Dollar repatriation in the July-September period fell to $93 billion, around half of second-quarter volumes and less than a third of the $300 billion or so sent home from January to March, U.S. current account data shows. The repatriation bonanza followed new regulations that allowed the U.S. government to tax profits accumulated overseas, regardless of where the money was held… The current account data shows repatriation in all sectors. Looking at just non-financial companies, JPMorgan calculates $60 billion was repatriated in the third quarter, versus $225 billion in the first quarter and $115 billion in the second quarter.”
“U.S. companies have sent home over half a trillion dollars of cash they held overseas in 2018 to take advantage of tax changes, but data suggest the pace is slowing, potentially removing a key source of support for Wall Street. Dollar repatriation in the July-September period fell to $93 billion, around half of second-quarter volumes and less than a third of the $300 billion or so sent home from January to March, U.S. current account data shows. The repatriation bonanza followed new regulations that allowed the U.S. government to tax profits accumulated overseas, regardless of where the money was held… The current account data shows repatriation in all sectors. Looking at just non-financial companies, JPMorgan calculates $60 billion was repatriated in the third quarter, versus $225 billion in the first quarter and $115 billion in the second quarter.”
Europe Watch:
January 2 – Bloomberg (Sotiris Nikas):
“After emerging from its steepest economic crisis in living memory, Greece still has a mountain to climb in 2019 if it’s to consummate its comeback with a sustained return to bond markets. The government plans to issue as much as 7 billion euros ($8 billion) of new debt this year, using part of its cash buffer to repay some International Monetary Fund loans early. The finance ministry could test markets with a short or medium-term note as soon as this month if market conditions allow it…”
“After emerging from its steepest economic crisis in living memory, Greece still has a mountain to climb in 2019 if it’s to consummate its comeback with a sustained return to bond markets. The government plans to issue as much as 7 billion euros ($8 billion) of new debt this year, using part of its cash buffer to repay some International Monetary Fund loans early. The finance ministry could test markets with a short or medium-term note as soon as this month if market conditions allow it…”
Japan Watch:
January 3 – Bloomberg (Cecile Vannucci):
“For Japanese investors, skepticism remains high after a year that has seen $938 billion of stock values vanish. The cost of hedging against declines in the Nikkei 225 Stock Average is near its highest level since February 2016… The gauge’s 10% slide in December worsened its first annual slump since 2011.”
“For Japanese investors, skepticism remains high after a year that has seen $938 billion of stock values vanish. The cost of hedging against declines in the Nikkei 225 Stock Average is near its highest level since February 2016… The gauge’s 10% slide in December worsened its first annual slump since 2011.”
Geopolitical Watch:
January 2 – Bloomberg:
“Chinese President Xi Jinping said Taiwan must be unified with the mainland to achieve his goal of completing the country’s rejuvenation. ‘China must and will be united, which is an inevitable requirement for the historical rejuvenation of the Chinese nation in the new era,” Xi told a gathering in Beijing to mark the 40th anniversary of a landmark Beijing overture to Taipei... Xi also sent a warning to advocates of Taiwan’s independence, who include supporters of Taiwanese President Tsai Ing-wen. ‘It’s a legal fact that both sides of the straits belong to one China, and cannot be changed by anyone or any force,’ Xi said. Tsai warned against continued threats from China in her New Year’s Day address Tuesday, signaling a hard line despite her recent election losses to Taiwan’s more Beijing-friendly Kuomintang opposition.”
“Chinese President Xi Jinping said Taiwan must be unified with the mainland to achieve his goal of completing the country’s rejuvenation. ‘China must and will be united, which is an inevitable requirement for the historical rejuvenation of the Chinese nation in the new era,” Xi told a gathering in Beijing to mark the 40th anniversary of a landmark Beijing overture to Taipei... Xi also sent a warning to advocates of Taiwan’s independence, who include supporters of Taiwanese President Tsai Ing-wen. ‘It’s a legal fact that both sides of the straits belong to one China, and cannot be changed by anyone or any force,’ Xi said. Tsai warned against continued threats from China in her New Year’s Day address Tuesday, signaling a hard line despite her recent election losses to Taiwan’s more Beijing-friendly Kuomintang opposition.”
January 1 – Reuters (Jessie Pang and James Pomfret):
“Thousands of demonstrators marched in Hong Kong on Tuesday to demand full democracy, fundamental rights, and even independence from China in the face of what many see as a marked clampdown by the Communist Party on local freedoms.”
“Thousands of demonstrators marched in Hong Kong on Tuesday to demand full democracy, fundamental rights, and even independence from China in the face of what many see as a marked clampdown by the Communist Party on local freedoms.”
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