Putin Goes to China.

All about Bobbie.

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1. Investors are striking gold in most every market. The Dow Jones Industrial Average crossed the 40000 mark for the first time Thursday amid an almost picture-perfect investing environment featuring resilient corporate profits, low unemployment and easing inflation. Most everything is going up—established Dow stocks, faster-growing tech shares, bitcoin and other cryptocurrencies, and even gold and other precious metals. Risk-averse investors have a bounty of options, too, including certificates of deposit offering yields of about 5% and rising junk bonds and other fixed-income investments, adding to the glow.  Growth stocks are expensive, but the rest of the market isn’t, says Ben Inker, co-head of asset allocation at Boston-based investment firm GMO. He says the overall investing environment, with its many reasonable choices, has rarely been this attractive in 24 years. (Source: wsj.com)

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2. The Economist:

Four years into the property crisis, the potential collapse of another Chinese real-estate giant may seem unremarkable. Evergrande, the world’s most indebted homebuilder, fell in 2021. Country Garden, once China’s biggest developer, followed suit in 2023. Yet Vanke is different. Shenzhen Metro, a state-owned firm, holds about a quarter of its shares. This has given it greater access to state funds than its purely private peers. Late last year it was also included on a list of “high-quality” developers to which the government encouraged bank lending. And still the firm is short on funds to pay down debts.

Thus investors are hyper-focused on Vanke and its attempt to come up with the cash. The company lost 1.7 billion yuan in the first quarter of 2024, as its sales fell year over year by 43%. It owes 320 billion yuan, with about 31 billion yuan in public bonds that are due to mature over the coming year. If the company defaults, trust in all state-backed developers, which until now have weathered the crisis better than their private peers, would be under threat. As such, investors worry a default at Vanke could “break China’s back”, note analysts at Jefferies, an investment bank, prompting confidence in the state itself to evaporate. (Source: economist.com, italics mine)