[00:00] Hey there, this is MacroMicro. Welcome to the Spotlight of the Week. Ever wondered if there's a single indicator that can predict global equity trends? Guess what, that indicator is Taiwan's exports,
[00:12] which have consistently led the MSCI Equity Index by around 8 to 12 months. Take 2010 for example. Taiwanese export growth peaked in January, and 12 months later, the MSCI Equity Index also hit a peak.
[00:24] The same pattern can be observed in 2014, 2017, and 2021. But why Taiwan? It all boils down to its pivotal role in the global supply chain. Taiwan sits at the upstream end, which means it's among the first to see changes in
[00:38] manufacturers' orders signaling shifts in global business conditions ahead of time. During economic downturns, Taiwan's exports declined early on, as downstream manufacturers would cut back on orders to prevent inventory buildup.
[00:51] Conversely, when the economy picks up, in anticipation of consumer demand making a comeback, manufacturers around the world start placing more orders, and Taiwan feels the surge first through its exports. This is why Taiwanese export growth can serve as a useful leading
[01:06] indicator for global business performance. Fast forward to today, Taiwanese exports have rebounded since the second half of 2023. The global stock market, represented by the MSCI Equi Index, also got back on an upward trend around the end of 2023. So how long will this
[01:22] momentum last. Let's keep an eye on Taiwan's export data for clues. For more details and the full article, visit our website. Thanks for watching and we'll see you next time.