Weekly Market Update - 21 August 2023

Unease In China

Red flags are popping up across China’s financial markets, making investors increasingly anxious about the health of the economy and intensifying pressure on policymakers to act. Renewed concerns about the property sector, missed payments by one of the nation’s largest private wealth managers, unprecedented losses at China-focused hedge funds and the threat of deflation have all combined to hammer investor sentiment. The question now is, what will China do about it?

Source: Bloomberg

Cutting Back

Michael Burry’s Scion Asset Management exited its stakes in Alibaba and JD.com in the second quarter, ditching the stocks just months after doubling down on them. The two Chinese tech giants had comprised 20% of the firm’s portfolio and were its top two equity holdings at the end of March. Scion liquidated holdings in 15 companies in the second quarter, including banks that it had scooped up as several lenders failed. Meanwhile, Warren Buffett’s Berkshire Hathaway slashed its stake in Activision Blizzard by 70% during the second quarter, exited its position in insurance broker Marsh McLennan, and trimmed positions in other companies including Chevron.

Source: Bloomberg

Goldman Hiring Again

Goldman Sachs is going on a hiring spree in order to address concerns raised by banking supervisors, including the Federal Reserve, during a fresh bout of regulatory scrutiny. Several hundred back-office staff are being enlisted, even as the firm cuts executives from money-making ranks amid a slump in business. Goldman’s new hiring push is the first tangible fallout to emerge from regulators’ heightened interest in the firm. The bank has seen at least three rounds of job cuts in less than a year as part of a deep cost-savings drive.

Source: Bloomberg