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Hi Reader, here's what you need to know for January 18th in 3:11 minutes.

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Today's big stories

China’s growth stalled in 2022, but its unexpectedly strong fourth-quarter figures gave hope for this year
These three indicators are signaling a comeback for stocks – Read Now
Goldman Sachs’s quarterly results missed expectations by a mile

Hopping And Splashing

What’s Going On Here?

Data out on Tuesday showed that China’s economy expanded by 3% in 2022 – the slowest rate of growth, excluding the pandemic years, for nearly half a century.

What Does This Mean?

Spending most of 2022 cooped up in lockdowns meant that China was always going to have a tough time hitting its ambitious growth target of 5.5%. And let's face it, the 3% that the country did achieve is pretty glacial by its own track record (tweet this). In fact, last year’s growth marked the first time in decades that the world as a whole outpaced China’s economic performance. But it’s not a total sob story: the country had a bit more pep in its step as the year drew to a close, and the fourth quarter’s growth actually outstripped economists’ predictions. So sure, Covid’s still a nuisance in China, but this weekend ushers in the year of the water rabbit, supposedly bringing patience and prosperity – so the country just might have luck on its side.

Why Should I Care?

Zooming out: See-saw.
Now that China’s reopening, there's one worry niggling at economists’ minds: whether this move will help or hinder the fight against inflation. See, some experts think that a reopened, re-invigorated China will be extra-thirsty for resources like oil, sending prices skyward. But others point out that an unfettered China could lead to unclogged supply chains and free-flowing goods, easing price pressures instead. Time will tell which factor packs a bigger punch…

The bigger picture: Baby bust.
China's one-child policy was scrapped in 2016, so you might expect the birth rate to be booming – especially given the boredom and pent-up energy that lockdowns entail. But China's population actually fell for the first time in 60 years in 2022, and that’s a problem. Just ask Japan: now labeled “the land of the setting sun”, its slipping population has held economic growth back for a generation. Maybe it’s time for a three-child policy.

You might also like: With less to drag on China’s economy, here’s where to look for opportunities.

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Analyst Take

Stocks May Be Ready For A Breakout, According To These Three Indicators

By Russell Burns, Analyst

We’re only a couple of weeks into 2023, but the S&P 500 is already dropping hints that this year could be an interesting one.

And if – like me – you’re obsessed with charts, you might have already noticed this.

If not, let me show you three major technical indicators, and explain what they say about the potential for a stock market rally.

That’s today’s Insight: the three technical indicators that are pointing to a higher S&P 500.

Read or listen to the Insight here

New Year, new economy

Well, maybe.

The threat of a portfolio-busting recession is sticking around, so you might want to hold some defensive stocks – that’s ones like defense, tobacco, and pharmaceuticals.

But headache-inducing inflation is expected to let up later this year, as are stock-denting interest rates. In that case, you might want to pick up some so-called recovery stocks.

That leaves you with a heap of options, so maybe this will help: IG has released its top defense and recovery picks for the upcoming year.

Get the rundown today: discover what IG’s backing this year.

Find Out More

Disclaimer

Your capital is at risk. The value of shares, ETFs, and ETCs can fall as well as rise, which could mean getting back less than you originally put in.