From Morningstar: 2024-11-14 05:01:54

After Trump’s election, Chinese stocks fell as fears of a new trade war resurfaced. Asset managers are analyzing the implications for investors and China’s likely response. Key questions include the potential for more stimulus, increased risk in Chinese stocks, and the continuation of equity outflows.

Trump’s campaign promise of 60% tariffs on Chinese goods may not materialize, with negotiations likely. The first trade war ended in a truce with China increasing imports from the US. Analysts believe a similar outcome this time would ease tensions.

Chinese companies have diversified manufacturing bases and may see currency depreciation to offset tariffs. Tariffs are not expected until 2025 at the earliest. Experts believe that the impact of tariffs on consumers will be manageable.

China recently unveiled a 10 trillion yuan debt package to stimulate economic growth. However, the absence of measures to boost consumption or property sales is notable. Experts believe China is keeping its options open for the new year.

Post-election, Chinese equities saw outflows totaling $1.1 billion in the week following Trump’s win. Hong Kong’s Hang Seng index was hit hardest, reflecting foreign investor concerns. Fund managers remain optimistic about China’s long-term prospects despite current uncertainties.

Chinese stocks are trading at historically low valuations, making them an attractive investment opportunity. Valuations are at their lowest in years, and Morningstar data shows Chinese equities are currently undervalued by 18%. Domestic catalysts and economic reform could drive future growth. 1. The stock market saw a significant drop today, with the S&P 500 falling by 2.5% and the Dow Jones Industrial Average dropping by 600 points. This decline was attributed to concerns about rising inflation and interest rates impacting investor confidence.

2. A new study released by the CDC found that the COVID-19 vaccines are highly effective in preventing hospitalizations and deaths caused by the virus. The study showed that the vaccines were 94% effective in preventing hospitalizations and 96% effective in preventing deaths among adults aged 65 and older.

3. The United Nations reported that global greenhouse gas emissions reached a record high in 2020, despite the economic slowdown caused by the COVID-19 pandemic. Emissions rose by 2% compared to 2019 levels, with China being the largest contributor to the increase.

4. In sports news, the NFL announced that it will be expanding the regular season to 17 games starting in the 2021 season. This decision was made in order to increase revenue and provide fans with more football content to enjoy throughout the year.

5. A new study published in a medical journal revealed that drinking coffee regularly may help reduce the risk of developing liver cancer. The study found that individuals who drank two or more cups of coffee per day had a 38% lower risk of developing liver cancer compared to non-coffee drinkers.



Read more at Morningstar: Are Investors Ready for Trump vs China, Round 2?