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China tensions ratcheting up

The EU, UK, U.S and Canada jointly imposed sanctions on officials in China over the human rights abuses in Xinjiang earlier this week, and China hit back with sanctions of their own, especially aimed towards Europe...

The sanctions have cast doubt on the ratification of the EU-China investment deal (CAI) and China 's social media has suddenly come alive with calls to boycott the boycotters:

H&M faces boycott calls in China for refusing to buy Xinjiang cotton over Uyghur abuse
Nike is also being targeted for expressing human rights concerns, per the NYT.
After H&M, more foreign retail brands under fire in China in Xinjiang fallout
More foreign retail brands came under criticism from social media in China on Thursday, in the wake of Beijing’s propaganda offensive against H&M over the Swedish company’s previously aired concerns on Xinjiang.

H&M actually announced their decision to stop buying cotton from the region a year ago so the timing of this social media storm is 'interesting'...

Hong Kong is basically China now πŸ‘‡

Exclusive: Hong Kong tells foreign governments to stop accepting special British passport
The Hong Kong government has told some foreign consulates to stop accepting a British travel document that many of its young people use to apply for working holiday visas in Europe, North America and parts of Asia, diplomats say.

Whichever way you slice it there seems to be no going back...

The allies are getting back together and China isn't even thinking about changing course...

We wrote about this last year πŸ‘‡

The World Is Decoupling From China
There is a lot packed into this note. This is longer than I usually send out. There’s a good reason though. This note could frame our investing outlook for the coming years… It’s worth bending the rules. Let’s give your attention span a workout, and dive straight in. China stands increasingly …

And it looks increasingly like this decoupling and shifting of supply chains away from China is set to continue...

But what does the future hold?

This thread of snippets from a conversation with Former Deputy National Security Advisor Matt Pottinger is thought-provoking πŸ‘‡

To what extent do CEO's worry about reputational risk?

Principles over profits? πŸ€”

Time will tell...


πŸ”₯ Hot and 🚫 Not

πŸ”₯ Neurocrine Biosciences

NBIX +8% in pre-market after the announcement that they will replace O-I Glass in the S&P MidCap 400...

Neurocrine Biosciences, Inc. is a neuroscience-focused, biopharmaceutical company. It discovers, develops and intends to commercialize drugs for the treatment of neurological and endocrine related diseases and disorders.

A glance at the list of therapeutic interventions they're working on...

anxiety, depression, alzheimer's disease, insomnia, stroke, malignant brain tumors, multiple sclerosis, obesity, and diabetes

Wow. Should keep them busy!

🚫 European Fashion Stocks

The China backlash sent shares of Adidas, Inditex and H&M tumbling, with Adidas (-5.8%) the biggest losers on the day...


Swiss National Bank: Negative rates for years to come

Yep, the Swiss National Bank kept their deposit rate at -0.75% again at today's meeting and they will continue intervening to weaken the Franc....

The SNB still considers the Swiss franc to be "highly valued" and say they are "ready to intervene on the foreign exchange market if necessary, taking into account the situation for all currencies"

β€œForeign exchange market interventions and the associated expansion of the balance sheet are currently a necessary monetary policy instrument and have nothing to do with currency manipulation.”

That line (and a few other factors) all feature in today's premium piece Β 

Give it a read here πŸ‘‡

Premium: Are we buying tech again?
With these factors included, I see the path of least resistance in the near future being to the upside for tech.It makes most sense.