The second week of the year has started with a positive note with the US and China looking to get together to have a conversation on how each countries needs’, desires, wants be satisfied. It is sure to be an interesting and amusing time period – in other words volatile – we’ll likely see strong strong rallies with slow pull backs and the net-net over the coming months may be negative, unless several things change – what are these things?

I don’t know, but whatever will change investor confidence, some may say it will be the Fed pausing on interest rate hikes – leading to a weaker USD – and thus a positive for markets especially “emerging” ones. Some may say it will be the fiscal spending out of China, in 2016 they spent 1 trillion USD to save the world markets, will this happen again? Domestically thoughts may be that an election will be positive, but is it different this time? The military and powers that be will most likely control the government, so what will really change from the past four years?

One nagging thought that remains is in Thailand, the BOT has the repo rate at 1.75% and the yield on the market is ~3%. Is this a good enough spread? Normally you’d say yes.

Last thought – interesting that the MAI is now trading at 7x PE according to the data…but a reverse analysis still gave us a 20x-29x depending if you include some defunct companies.

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