http://watch.bnn.ca/business-day/december-2012/business-day-am-december-13-2012/#clip826013

Incoming premier Li Keqiang, who will succeed Wen Jiabao in March, will be present at the CEWC and is widely viewed as a proponent for bolder reforms. The closely watched meeting’s focus will be on macroeconomic policy, tax reform, income distribution, and urbanization. Output from the session is expected to include plans for further monetary easing, with lowered rates to cut corporate financing costs and gradually lower reserve requirements for banks.

As China’s economic data seems to be turning a corner, one play could be avoidance of US Chinese ETFs, whose movement has been divergent from the Chinese stock market, and instead make a long play in commodities. Forecasted to slow, Chinese copper consumption could maintain 4.8% growth or improve, creating opportunities in copper futures and related equity options. 

John Voorheis
KOTM Contributor
jlvoorheis2@gmail.com

• Court ruling stated that Apple’s iPhone infringes on three patents held by MobileMedia (jointly owned by Sony, Nokia, and MPEG LA)

• Survey from Piper Jaffray shows that 53.3% of consumers plan on purchasing an iPhone 5 within the near future

• Intel’s new Corei7 processors likely to be installed in Apple’s iMac lineup starting in 2013 and is a highly anticipated addition

• Apple Files new patent for an intelligent call waiting system, that automatically places incoming calls on hold, when user is on the other line and can translate voicemail into text message

As you may recall in September of 2012, ratings firm Egan-Jones slashed the U.S. bond rating to AA- following the announcement of QE3. With Federal Reserve stimulus now more than double what it was in September, we should be on the lookout for another possible downgrade to U.S. treasury bonds in 2013 as the US debt-GDP ratio continues to widen. Looking to Europe, the ECB will most likely be forced to ease as well to push the EURUSD lower or face a currency devaluation that would be insufferable. Going forward, the Fed said it plans on continuing this “stimulation” until the unemployment rate falls below 6.5% and inflation projections remain no more than half a percentage point above 2% two years out. The empirical relationship between unemployment and the S&P 500, coupled with the possibility of going over the fiscal cliff increasing with every day, we could very well see a retracement in the S&P to 750.