February 10, 2022
The Euro Stoxx 50 (SX5E) and Hong Kong’s Hang Seng (HSI) index are positively correlated with US value sector performance. The SX5E is also in bullish consolidation mode, but outperforming the S&P 500. The HSI has been building a bottom for the past two months and looks like a coiled spring in front of only weak technical resistance. Today’s release of China M2 money supply and bank lending for January far exceeded expectations as the credit impulse kicks into gear. We continue to expect US value sector outperformance in the months ahead with Financials and Energy as favorites.