China puts Shanghai into Omicron lockdown
The city of 25 million and China’s financial hub began a phased lockdown today. A wave of Omicron infections hit a record of 3,450 daily asymptomatic cases on Sunday. That’s nearly 70% of China’s total.
The city of 25 million and China’s financial hub began a phased lockdown today. A wave of Omicron infections hit a record of 3,450 daily asymptomatic cases on Sunday. That’s nearly 70% of China’s total.
Yesterday, March 15, I was thinking that I wished I didn’t own any China stocks at all. Today, March 16, I wished I owned more. Lot’s more.
In the coming week I expect global stock market action to shift to China. With every other stock market looking almost too risky to invest in, and the recent advice to invest in emerging market stocks, China’s short-term story looks (relatively) very attractiveAt the opening of China’s weekend session of the country’s legislature on Saturday, China’s premier, Li Keqiang, announced that the 2020 growth target for the country’s economy was “around 5.5 percent.”
With the end of the Lunar New Year holiday and the reopening of China’s stock markets, China’s state-backed investment funds have started buying shares of the Chinese stocks traded on U.S. markets. The move follows actions by the People’s Bank of China to inject cash into the economy and financial markets.
I’m starting up my videos on JubakAM.com again–this time using YouTube as a platform. My ninety-first YouTube video “QuickPick: FXI China ETF” went up today.
Today, the People’s Bank of China cut its key interest rate for the first time in almost two years to help support China’s economy. The People’s Bank of China lowered the rate at which it provides one-year loans to banks by 10 basis points. Not a huge move–100 basis points equals one percentage point–but earlier than many economists–and I–had anticipated.
In other years this would clearly be the time to jump into China stocks. What we have right now is a classic, tried-and-true set up for big gains from buying China stocks. With a “but” or two that suggests a cautious strategy. But I will be buying shares of Tencent Holdings and the FXI ETF on Monday, January 3.
It’s the problem that won’t go away if you’re looking to build a diversified portfolio of ETFs (or any other asset) to manage the risk that some one asset class will implode unexpectedly. Given the continued outperformance of U.S. stocks, How do you diversify toe manage risk without giving up too much in current performance?
Last Wednesday, July 28, Chinese financial regulators told big investors–banks and investment groups heavily exposed to China’s stock market–not to worry. China’s financial markets were sound and despite the fears engendered by the government’s crackdown on the country’s private, for-profit, education companies, the government was not looking to reverse decades of growth by companies in China’s private sector. The meeting worked. Stocks of companies like Meituan (MPNGF), China’s dominant food delivery company (with ambitions to become a full-range e-shopping competitor) rose to $30.07 on the day from $26.00 the day before. But the reassurance worked for only a few days. Today, August 3, for example, Meituan was back in the red, falling 4.48% to $26.95 to erase almost all of its “re-assurance” bounce. Today, I’m selling Meitun and Naspers (NPSNY), a South African company with a huge position in China’s Tencent Holding (TCEHY) out of my Volatility and Jubak Picks Portfolios, respectively.