• Home
  • Politics
  • Health
  • World
  • Business
  • Finance
  • Tech
  • More
    • Sports
    • Entertainment
    • Lifestyle
What's Hot

Trump Announces First Post-Tariff Trade Deal

May 8, 2025

100 Funny Father’s Day Quotes for Hilariously Relatable Humor (and Plenty of Love Too)

May 8, 2025

Top 10 Benefits Of Acupuncture

May 8, 2025
Facebook Twitter Instagram
  • Contact
  • Privacy Policy
  • Terms & Conditions
Thursday, May 8
Patriot Now NewsPatriot Now News
  • Home
  • Politics

    Security video shows brazen sexual assault of California woman by homeless man

    October 24, 2023

    Woman makes disturbing discovery after her boyfriend chases away home intruder who stabbed him

    October 24, 2023

    Poll finds Americans overwhelmingly support Israel’s war on Hamas, but younger Americans defend Hamas

    October 24, 2023

    Off-duty pilot charged with 83 counts of attempted murder after allegedly trying to shut off engines midflight on Alaska Airlines

    October 23, 2023

    Leaked audio of Shelia Jackson Lee abusively cursing staffer

    October 22, 2023
  • Health

    Disparities In Cataract Care Are A Sorry Sight

    October 16, 2023

    Vaccine Stocks—Including Pfizer, Moderna, BioNTech And Novavax—Slide Amid Plummeting Demand

    October 16, 2023

    Long-term steroid use should be a last resort

    October 16, 2023

    Rite Aid Files For Bankruptcy With More ‘Underperforming Stores’ To Close

    October 16, 2023

    Who’s Still Dying From Complications Related To Covid-19?

    October 16, 2023
  • World

    New York Democrat Dan Goldman Accuses ‘Conservatives in the South’ of Holding Rallies with ‘Swastikas’

    October 13, 2023

    IDF Ret. Major General Describes Rushing to Save Son, Granddaughter During Hamas Invasion

    October 13, 2023

    Black Lives Matter Group Deletes Tweet Showing Support for Hamas 

    October 13, 2023

    AOC Denounces NYC Rally Cheering Hamas Terrorism: ‘Unacceptable’

    October 13, 2023

    L.A. Prosecutors Call Out Soros-Backed Gascón for Silence on Israel

    October 13, 2023
  • Business

    Trump Announces First Post-Tariff Trade Deal

    May 8, 2025

    Electric Vehicle Sales Nosedive As GOP Takes Buzzsaw To Biden’s Mandate

    May 7, 2025

    Tyson Foods Announces It Will Bend The Knee To Trump Admin’s New Rules

    May 7, 2025

    Federal Reserve Holds Interest Rates Steady Despite Pressure From Trump

    May 7, 2025

    ‘Wait Them Out’: John Kennedy Tells Larry Kudlow One Lie He Suspects China’s Telling US

    May 7, 2025
  • Finance

    Ending China’s De Minimis Exception Brings 3 Benefits for Americans

    April 17, 2025

    The Trump Tariff Shock Should Push Indonesia to Reform Its Economy

    April 17, 2025

    Tariff Talks an Opportunity to Reinvigorate the Japan-US Alliance

    April 17, 2025

    How China’s Companies Are Responding to the US Trade War

    April 16, 2025

    The US Flip-flop Over H20 Chip Restrictions 

    April 16, 2025
  • Tech

    Cruz Confronts Zuckerberg on Pointless Warning for Child Porn Searches

    February 2, 2024

    FTX Abandons Plans to Relaunch Crypto Exchange, Commits to Full Repayment of Customers and Creditors

    February 2, 2024

    Elon Musk Proposes Tesla Reincorporates in Texas After Delaware Judge Voids Pay Package

    February 2, 2024

    Tesla’s Elon Musk Tops Disney’s Bob Iger as Most Overrated Chief Executive

    February 2, 2024

    Mark Zuckerberg’s Wealth Grew $84 Billion in 2023 as Pedophiles Target Children on Facebook, Instagram

    February 2, 2024
  • More
    • Sports
    • Entertainment
    • Lifestyle
Patriot Now NewsPatriot Now News
Home»Finance»Darkening Gloom in Chinese Stocks Puzzles Wall Street Veterans
Finance

Darkening Gloom in Chinese Stocks Puzzles Wall Street Veterans

April 27, 2023No Comments5 Mins Read
Facebook Twitter Pinterest LinkedIn Tumblr Email
Darkening Gloom in Chinese Stocks Puzzles Wall Street Veterans
Share
Facebook Twitter LinkedIn Pinterest Email

(Bloomberg) — Confidence is in short supply among Chinese investors these days, confounding analysts who say reasons to own the market are finally coming true.

Most Read from Bloomberg

The MSCI China Index’s valuations are shrinking and 12-month rolling returns are negative, a sign investors are pricing in an earnings contraction. Recession-proof trades are gaining traction, with a defensive strategy of buying dividend payers suddenly among the year’s most profitable.

Investor pessimism — worsened by US tensions — has become so entrenched it’s suppressing prices when improving fundamentals may justify a move higher. The MSCI China is lagging almost every other global benchmark in April, even after economic data surpassed estimates by the most since 2006 and global banks raised their forecasts for earnings growth.

“There’s a clear negative bias right now,” Winnie Wu, China equity strategist at Bank of America Corp., said by phone. “There’s a sense that China’s post-Covid recovery needs a longer track record. The problem is a lot of people have no patience to commit now and wait.”

Analysts are calling for an average 22% surge in operating income for MSCI China companies — the fastest growth since 2011. But investors keep selling: tech shares are in a bear market and charts are forming ominous indicators. Mainland and Hong Kong stocks lost a combined $866 billion in just over a week — a faster selloff than during October’s capitulation.

Fears of what China would look like under President Xi Jinping’s total control led to a massive selloff following the party Congress in October. While investors returned after Beijing dropped Covid controls and promised to prioritize growth, the selloff now may reflect the continued unease over a government that cracked down on the nation’s most profitable companies at the expense of the economy and investors.

See also  India’s Space Cooperation With the Middle East

Market watchers see several reasons for the deteriorating sentiment. Most say tensions with the US are spooking international funds, while some blame divestments by famed long-time China investors or corporate insiders. Others attribute it to skepticism about the recovery in consumption.

Mixo Das, Asia equity strategist at JPMorgan Chase & Co., says investors will soon run out of reasons to avoid holding Chinese stocks, with low multiples and better earnings driving prices higher. The MSCI China is trading at just 7.6 times expected operating profit — 9% cheaper than averages going back nearly two decades. The multiple is 34% lower versus the MSCI All-Country World index and 45% below the S&P 500’s valuation.

Such discounts are typical during periods of acute stress, like the 2020 Wuhan lockdown, the 2018 trade war, the hard-landing era of 2016 and the bursting of the stock bubble in 2015. But unlike those times, it’s difficult to find anyone bearish enough to predict a crash in China’s economy or financial system right now.

Morgan Stanley’s Asia-based strategy team, known for advising against buying the dip throughout the stock selloff in 2021 and 2022, have just reiterated their bullish call on China because they expect better growth and relations with key economic allies to improve. For abrdn, the pullback is a “good opportunity for long-term investors” to get into reopening-related stocks, according to Pruksa Iamthongthong, senior investment director of Asian equities.

That’s not to say everyone is upbeat — far from it. Pilar Gomez-Bravo, co-chief investment officer of global fixed income at MFS Investment in London, says it’s still unclear whether the jump in March activity was distorted by the sudden reopening or a reflection of actual demand.

See also  Stocks edge higher with Treasury yields in holiday-shortened session

“The People’s Bank of China is saying: don’t worry, we’re sort of going through this path of reopening and kind of trust that we’ll kind of control that,” said Gomez-Bravo, whose team is underweight Chinese government bonds and trimming its exposure in property high yield credit. “But unless you have a clearer picture, it’s too early to have conviction.”

Much of the driving force for global flows into Chinese stocks is coming from geopolitics. Headlines concerning China’s stance on European countries and the war in Ukraine, military drills near Taiwan or the Biden administration’s restrictions on key technologies are adding to the market’s nervousness.

“It scares a lot of institutional investors that would normally be willing to put a lot of money into China,” said Mark Mobius, co-founder of Mobius Capital Partners. “It’s a real problem.”

Another key risk is — what if the market’s gloomy outlook on the economy proves accurate in a few months? Asia funds, who unlike their US counterparts turned overweight on China during the reopening trade, are now cutting their exposure. Selling by global long-only investors has sapped China’s markets of liquidity because onshore investors have yet to plug the gap, according to Wu at BofA.

“People are reluctant to be positive — this is a little bit natural after a long downcycle,” said Das at JPMorgan. “The evidence is already there. The remaining bit is time.”

–With assistance from Abhishek Vishnoi.

Most Read from Bloomberg Businessweek

©2023 Bloomberg L.P.

Chinese Darkening Gloom Puzzles Stocks Street veterans Wall
Share. Facebook Twitter Pinterest LinkedIn Tumblr Email

Related Posts

Chinese Companies Are Moving to Texas, Nevada To Avoid Trump’s Tariffs

May 5, 2025

Lockheed Martin Allegedly Can’t Even Recognize Veterans Day

May 2, 2025

What Is The Best Option For Veterans Needing In-Home Care?

April 28, 2025

Chinese Manufacturers Flood TikTok To Subvert Trump’s Tariff Agenda

April 28, 2025
Add A Comment

Leave A Reply Cancel Reply

Top Posts

Media Outlets Push for Increased Transparency as Veil of Secrecy Continues

October 18, 2023

Chinese E-retailer Temu Files Lawsuit in US Against Rival Shein, Alleging Antitrust Violations

July 19, 2023

Social Media Haters Attack Christian College Over Biblical LGBTQ Polices After Basketball Team’s 108-14 Loss

December 12, 2023

‘There Will Be Attrition’: Biden Admin To Slash Handout For Chip Maker In Blow To $39 Billion Manufacturing Push

November 25, 2024
Don't Miss

Trump Announces First Post-Tariff Trade Deal

Business May 8, 2025

President Donald Trump announced Thursday the U.S. has reached a trade agreement with the U.K.,…

100 Funny Father’s Day Quotes for Hilariously Relatable Humor (and Plenty of Love Too)

May 8, 2025

Top 10 Benefits Of Acupuncture

May 8, 2025

Electric Vehicle Sales Nosedive As GOP Takes Buzzsaw To Biden’s Mandate

May 7, 2025
About
About

This is your World, Tech, Health, Entertainment and Sports website. We provide the latest breaking news straight from the News industry.

We're social. Connect with us:

Facebook Twitter Instagram Pinterest
Categories
  • Business (4,110)
  • Entertainment (4,220)
  • Finance (3,202)
  • Health (1,938)
  • Lifestyle (1,626)
  • Politics (3,084)
  • Sports (4,036)
  • Tech (2,006)
  • Uncategorized (4)
  • World (3,944)
Our Picks

JPMorgan Chase (JPM) earnings 1Q 2023

April 14, 2023

Meta-analysis finds vegetarian diets effective in lowering cholesterol, glucose and weight

July 27, 2023

Majority Of Voters Believe Economy Has Worsened Under Biden: POLL

September 11, 2023
Popular Posts

Trump Announces First Post-Tariff Trade Deal

May 8, 2025

100 Funny Father’s Day Quotes for Hilariously Relatable Humor (and Plenty of Love Too)

May 8, 2025

Top 10 Benefits Of Acupuncture

May 8, 2025
© 2025 Patriotnownews.com - All rights reserved.
  • Contact
  • Privacy Policy
  • Terms & Conditions

Type above and press Enter to search. Press Esc to cancel.