Congress Outperforms Stock Market Again

FINANCE
Congress Outperforms Stock Market Again

A new report from Unusual Whales reveals that dozens of Congressional members, both Democrats and Republicans, outperformed the S&P 500 in 2024, fueling concerns about potential conflicts of interest in stock trading while in office. Democratic lawmakers saw average portfolio gains of 31%, while Republicans posted a 26% rise, compared to the S&P 500’s 24.9% increase.

The report analyzed publicly disclosed trades under the 2012 STOCK Act, which requires Congress members to report transactions exceeding $1,000. Critics argue the minimal $200 fine for late disclosures fails to deter questionable trading practices. Prominent figures like Rep. Nancy Pelosi and Sen. Ron Wyden were highlighted for significant gains, often linked to Big Tech holdings, a sector that actively lobbies Congress.

Public sentiment overwhelmingly supports banning stock trades by government officials. Despite repeated attempts, such legislation has stalled. Critics continue to call for greater accountability to prevent perceived advantages and restore trust in lawmakers.

ELON MUSK
EU Warns Musk Over Electoral Interference

Elon Musk’s plan to host a livestream with Alice Weidel, leader of Germany’s far-right Alternative for Germany (AfD) party, has ignited backlash across Europe. Critics, including German Chancellor Olaf Scholz and French President Emmanuel Macron, argue Musk is interfering in Germany’s electoral process ahead of its February election. The AfD, classified as a "suspected extremist organization" by German intelligence, advocates for tighter asylum laws, restrictions on combustion engine bans, and freedom of speech.

Musk, who publicly praised the AfD as “Germany’s savior,” has been accused of granting the party undue visibility on his platform, X. While the livestream itself may not violate laws, experts suggest it could undermine electoral integrity by failing to provide equal coverage to other political parties. Activists have also raised concerns about X’s algorithm amplifying Musk’s and the AfD’s content, potentially breaching the EU’s Digital Services Act.

German advocacy groups suggest the interview might even constitute an illegal party donation, as Musk uses his platform’s reach for political promotion. Meanwhile, the European Commission is considering interim measures to address content moderation concerns on X. Musk’s actions have reignited debates over the intersection of free speech, social media influence, and electoral fairness in Europe.

FINANCE
HSBC Bullish on Hong Kong Stocks

HSBC analysts have turned bullish on Chinese stocks listed in Hong Kong, projecting a 21% gain for the Hang Seng China Enterprises Index (HSCEI) in 2025. Strategists Herald van der Linde and Prerna Garg raised their year-end target to 8,800, citing improved economic prospects in mainland China and supportive government policies.

The upgrade comes despite geopolitical tensions, including Donald Trump’s tariff plans, and weak performance in Chinese stocks early this year. HSBC noted that lower interest rates, tourism initiatives, and property sector recovery efforts will bolster Hong Kong’s market.

The analysts also upgraded Hong Kong to overweight while downgrading India to neutral due to slowing growth and high valuations. South Korea was raised to neutral, citing attractive valuations after a selloff.

While HSBC remains optimistic about Chinese markets, other firms like Goldman Sachs and Morgan Stanley remain bearish, citing deflation risks and geopolitical uncertainty. Investors now await the National People’s Congress meeting for Beijing’s growth targets and stimulus plans.

DISCLAIMER: None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research.