Stock Market Resume Uptrend, With China Housing Market Help on the Way
The stock market has been in one of the strongest rallies since 2020 after the first wave of the pandemic, and it seems like nothing can stop it. We saw a retreat on Tuesday after the strong US inflation report for January, but buyers came right back and the uptrend is back on, with China also helping as they’re planning to save the real estate sector.
The troubles in China which came after three years of lockdowns, have culminated in the real estate sector. This sector has been having major difficulties with financing, which has been a drag on risk sentiment globally. But, Chinese officials are planning on intervening here, which should improve the sentiment even further, keeping equities rallying further.
The Wall Street Journal published a piece that highlights China’s initiatives aimed at stabilizing the housing market, with a particular focus on President Xi’s determination to address the property bubble. These measures entail significant financial commitments, estimated at $280 billion annually for a five-year period, totaling around $1.4 trillion.
One program has officials acquiring private buildings that are in difficulty and turning them into state homes for rent or sale under certain conditions. The other initiative aims to provide additional subsidized housing for low- and middle-income families. While addressing a pressing housing crisis, the proposed measures raise concerns due to their ambitious goal of increasing state ownership of housing stock to at least 30%, up from the current 5%. This aligns with Xi’s recent shift towards more communist-leaning policies.
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