🇺🇸 The US could swerve a recession

What’s going on here?

Chinese tech company Xiaomi grabbed all the attention last quarter, leaving US competitors in the shadows.

What does this mean?

Chinese shoppers haven’t been won over by the iPhone 15, despite Apple generously fitting the devices out with a couple more millimeters of display and some extra oomph in the inner core. Instead, their heads have been turned by Xiaomi’s more budget-friendly offerings. In fact, of the world’s five biggest smartphone brands, Xiaomi’s the only one that shipped more phones last quarter than both the previous quarter and the same time last year. Fold in a successful electric vehicle arm and hopes of AI-fueled streamlining, and the Chinese company’s stock has dialed up by 62% since June.

Why should I care?

For markets: Asia is a changing landscape.

China’s economic woes are shaping shoppers’ spending habits across the board, not just concerning new gadgets. On top of that, Japanese products are especially out of favor, with China taking a hard stance ever since Japan dumped treated water from the damaged Fukushima nuclear plant into the ocean. Case in point: Japanese cosmetics brand Shiseido was forced to trim its predictions for this year’s profit on Friday. So along with similarly hard-pressed peers like Apple, the company may want to look toward India for cheaper production costs and mounting demand for nice-to-haves.

The bigger picture: The US is old news.

China’s tech companies struggled to find their feet this year, tripped up by the country’s wobbling recovery. That’s left some big names nursing bruised stock prices, a stark contrast to US stocks which have picked up this year. So investors, wise to the fact that the likes of Apple and Tesla are facing challenges locally, could take the opportunity to back Chinese rivals for less. The Nasdaq Golden Dragon China index could be a popular choice: featuring major companies like Alibaba and JD.com, it’s around 30% cheaper to buy into than the Nasdaq 100 index.

What’s going on here?

Asking prices for homes in the UK posted their biggest wobble for five years.

What does this mean?

British property company Rightmove tracks asking prices around the country, capturing the initial asking price of almost every house up for sale. And this lot of stats is less than reassuring: asking prices slipped by 1.7% between October and November, the biggest fall at that time for five years, with London’s prices stripped back by 2.1%. See, high interest rates have made mortgages prohibitively expensive, so sellers have been forced to slash more than £6,000 ($7,320) off their homes to attract any buyers still in the market. But even with an average asking price of roughly £362,000 ($443,500), the lowest since the end of last year, there were still 10% fewer sales made than the same time in 2019.

Why should I care?

For markets: Not-so-mates rates.

Rightmove’s tracker indicates that the housing market’s backbone is weakening under the weight of high interest rates and economic uncertainty. Mortgage rates are triple what they were in 2022, and with 1.6 million fixed-rate mortgages due to expire next year, plenty of homeowners will soon be facing higher monthly payments. That’s a rough prospect for Brits who are already contending with wallet-emptying prices for everyday must-haves.

The bigger picture: The market’s pros could be a con.

In fairness, prices haven’t crashed – yet, anyway. Instead, they’ve been working their way down slowly to land just 3% below their May peak. And if anything, the rental market is too strong, with rising mortgages trickling into lease prices with a lag and pricing out plenty of hopefuls. Plus, newly optimistic builders seem to be anticipating a turnaround in the not-too-distant future. Thing is, all of those factors could be down to a limited supply of homes, rather than a projected one-eighty in demand.