End of China’s High Tech Aspirations

Forget a gradual decoupling from China. In October, the Biden administration announced new export controls and rules that effectively decapitate China’s semiconductor industry. The ramifications go beyond semiconductors to everything touched by them, including potentially ending nearly all of China’s high-tech aspirations.


Russia, Ukraine and Energy

Energy is only one reason for the Russian invasion of Ukraine. But it is an important reason. It’s not in the interest of Russia for a major alternative energy supplier for Europe to emerge. Ukraine enjoys major untapped energy deposits coupled with already existing pipeline infrastructure into Europe.

Despite this it is not likely to become an energy supply competitor to Russia. A quick look at the following two maps shows that Russia’s occupation overlaps with much of Ukraine’s oil and gas reserves. Supplies around the Crimea and eastern Ukraine are a big reason for both the Russian invasion and Ukraine’s resistance to trading land for peace, since in this case the land in question could be the difference between being a wealthy or poor country for Ukraine.


Where Are Stocks Headed?

In February of 2020 the S&P 500 made a new all-time high of nearly 3,400 points. Then the selloff began that would see an intraday low below 2,200 points. That is a 35 percent loss. But the market has since rebounded recovering to 2,846 points as I write this. This represents an almost 30 percent gain from the low, and has cut the market’s loss in half. In my view, it’s a great spot for investors who have not gotten defensive to sell some stocks and raise cash.


Prognosis for the Stock Market

ICangles Investment Post

The future for U.S. stocks over the next decade appears worrisome, regardless of the impact of the Corona Virus. Why? Because valuations matter. And stocks at the end of February were priced for perfection. Any significant negative development was poised to drive them lower.

The COVID-19 Virus that shutdown the U.S. economy has certainly qualified as a significant negative development. From that February peak, the U.S. stock market as measured by the S&P 500 has already lost about a quarter of its value. But even if stocks had continued to climb in the near-term, without the virus emerging, the decade plus outlook was still poor.