Indices: China’s Shenzhen CSI 300 Index
Chinese stocks tested their 2022 lows last week after plunging over -4%, a move we had previously flagged as a possibility as the two-plus year downtrend by the CSI 300 remains in play, i.e. it’s corrected ~40% with further losses looking likely early this week.
US indices rallied overnight delivering their best performance since June as bond yields retreated with economic data pointing to an end in the Feds tightening cycle. Almost 90% of the S&P500 closed higher led by the “tech mega-caps” as US 2-year treasury yields sank back below 4.9%. US job openings fell by more than expected to 8.83mn, another new 2-year low while consumer confidence fell amid a souring view towards jobs.
Beijing has started to pull its stimulus levers albeit in a very controlled manner so far, we believe they ultimately will prove successful but investors expecting some sledgehammer-style moves might be disappointed as Xi Jinping is picking the eyes out of their economic problems as opposed to a COVID style throwing of $$. i.e. targeted as opposed to general stimulus.
US stocks edged higher overnight with the S&P500 finishing up +0.15% in a quiet session to wave goodbye to July, US equities have now enjoyed their longest streak of monthly gains since August 2021 while the doomsday merchants remain very vocal but simply wrong.
China has become the equity market of choice for Fund Managers following its more than 40% pullback since 2021 – an easy stance to comprehend as China strives to reignite its economic growth engine following its futile COVID-zero policy.
Chinese equities have enjoyed a 4 week-long rally which has a bull market beckoning as China stock traders return to work this morning. The latest data has shown that consumption has rebounded strongly as the country reopens suggesting a sustained economic recovery has commenced, clearly good news for stocks after their 41% plunge from early 2021 highs. This is one upside move we would not fade as Beijing usually gets its way and they want a return to growth.
Foreign Minister Penny Wong’s visiting Beijing on Wednesday, the sheer fact she’s the first Australian Minister in over 3 years to visit is a huge step in the right direction of undoing some of the trade damage caused by Scott Morrison & Co. Politics aside, however you dissect the former Prime Ministers comments/stance towards China it always…
Most people think 2022 has been an awful year for equities but performance has actually been very stock/sector-specific, it hasn’t been an annulus horribilis for broad market investors. The ASX200 will commence its run towards Christmas this morning down less than 2% with dividends for the average portfolio more than making up for the slight fall. Last week…
