World Economic Forum - Whats Next?

Macro Perspectives: Tue 26 Jan 2021

Despite the midday price action (chart below) we have a big earnings week and the numbers are already coming in better than expected for Q4.

Companies are reporting on a quarter that the economy grew at an annualized rate between 4% (Reuters Poll) and 7% (Atlanta Fed Model projection), with the earnings numbers measured against a very low bar - the expectations that companies (and Wall Street) dialed down dramatically, to take advantage of a tumultuous environment.

We have earnings that should continue to beat expectations, and overall, may turn out to show growth (instead of contraction) on a quarter-over-quarter basis, by the time the earnings season is over. Positive surprises are fuel for stocks and the table has been set for positive earnings surprises - not just for the last quarter of 2020, but throughout 2021. 

The World Economic Forum kicked off yesterday. The event, typically held in Davos, is held as a virtual meeting this year. This is where the global elites told us last year, exactly what they envisioned for the world: The end of Trump - solving that problem became priority, above all else, around this time last year. It dominated the Davos meetings in 2020, they didn’t hide it.

Trump represented an existential threat 1) to the Chinese Communist Party, 2) to the global climate action plan, and 3) to the careers of entrenched politicians.

Now with Trump out, China has been transformed from a position of vulnerability (following years of Trump ordered sanctions and a debilitating trade deal) to the position of strength on the world stage. In fact, as we've discussed here in my daily notes, with Biden's plan to "normalize relations" with China, the path has been cleared for China to overtake the United States as the global economic superpower.

With that, who is the keynote speaker for this year's event? The Chinese Communist Party leader, President Xi.

He spoke yesterday, calling for coordination and collaboration, emphasizing the globalist way forward for the world (in dealing with the global economy, crises and equal rights), and rejecting the "American first" type of ideology (an implied repudiation of Trump).

As the week progresses through the World Economic Forum agenda, expect to hear more reporting about the role of China in the world (in reverence), the Global Reset ideology and, of course, the rollout of the climate action plan. The U.S. election result has become the greenlight for all of this.