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Mainland China stocks are in bearish territory: the Deutsche Bank China A-Shares (ASHR) ETF is down more than 20% from its top of January 26, 2018. Investors perceive a firesale and still buy despite the possibility of a trade war that worsens. (Photo: VCG)
Mainland Chinese stock markets look like a But for the moment, A shares are up, up about 3% from their lowest level this month, which is not bad since they are are down more than 24% since the January 26th summit.Another $ 200 billion is being prepared, which could be formalized by the end of the summer if trade negotiations with Beijing fail. Trump has already said that if China refuses to play ball, 500 billion additional dollars are We do not know if that is $ 300 billion in addition to the $ 200 billion that we are looking at now, or if it is $ 700 billion in all. That would mean that almost everything China sells to the United States would be taxed higher up at the border.
Earlier this month, well-known investor Mark Mobius said Trump's commercial tirades risked a global crisis. He said he suspected an additional correction of 10% on emerging market equities by the end of the year. Until now, emerging markets, led by China, have rebounded. New rates would be lower, at least in the short term.
Up to now, Wall Street has only considered commercial wars in the short term. Corrections of more than four hundred on the market were generally erased to a great extent in three trading days.
The Shanghai Composite Index is down 14% since July 13, but profit growth for large industrial enterprises is strong partly in the domestic market
See: This is that investors really think of Trump's commercial war – Forbes
Best Enemies? Trump called Xi his friend. But since his election, he has been relentless in his pursuit of US trade flows. (Photographer: Qilai Shen / Bloomberg)
Industrial profits rose 21.1% from one year to the next in May, the most recent data available, compared to 16.7% there a year ago. For the first five months of the year, the profits of the industry increased by 16.5%, about 1.5 percentage points higher than during the first four months of the year . Yet, for those who want to be negative about China, these figures are down 22.7% growth recorded in the first five months of 2017.
The slowdown in earnings growth is attributed to the growth of the economy. other financial conditions in China. Baidu, one of China's largest technology companies, will release its results this week. If they miss goals, look for them to highlight the credit conditions.
In the first five months of 2016, profits of Chinese enterprises increased by 6.4%, and during this period, profits declined slightly. China has been in swing mode for years. Investors seem to like the firesale they've seen in continental stocks and have been buyers. A shares were oversold in mid-July, bringing global investors back to China, based on EPFR Global tracking data released last week.
Industrial margins for the first five months of this year are the highest in 8 years for the same period, and the expansion of margins continued in May. Industrial value added increased by 6% in June compared with 7.6% a year ago and 6.6% in the second quarter, compared with 6.9% in 2Q17. Beijing will induce monetary and fiscal incentives in the second half as a detour along Trump's trade war against Xi.
"I still think that there is a high probability that Xi Jinping will follow the non-confrontational path, leading to negotiations with Trump who will resolve the bilateral dispute in the fall," says Andy Rothman, strategist in investment at Matthews Asia in San Francisco
"If I'm wrong, and the tariff dispute degenerates into a real trade war, there are key points to keep in mind," he says. First, the Chinese economy is no longer export-oriented, so the impact of a trade war will be modest. "
Net exports account for 2% of China's GDP, down from a peak of 9% in 2007. For most of China's economic growth and more than half of its GDP. [19659003] "The impact of Trump's import taxes will not be borne by Chinese companies," says Rothman. "It is also clear that Xi's government will step in to provide financial assistance to Chinese companies that are harmed by Trump tariffs, "he says.
Baidu publishes his findings on July 31. Photographer: Giulia Marchi / Bloomberg
Another thing that investors like about China right now despite the haircut : Beijing's stimulus measures are ready to be launched
Jian Chang says Barclays Capital options for the government to adopt a more expansionary stance to support growth As part of these options, it is likely that Beijin g will increase the size of the special bond program and will introduce more types of such bonds to raise funds from fixed income investors.
"They could increase spending for social programs such as health, education,"
Collectively, these expenditures account for about 7% of China's GDP compared to about 20% for the countries of the world. OECD
On the regulatory side, China will be careful not to impede growth because the supply chains can change because of tariffs already in place. Regulators will be aware of the fallout from the trade war.
Earlier this week, mutual fund firm Neuberger Berman issued a note to investors saying that they believed the liquidation of emerging market equities and bonds was exaggerated. And based on valuation alone, investors would be back in the coming weeks. [>
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China's continental equities are in bearish territory.The Deutsche Bank China A-Shares (ASHR) ETF is down more than 20% from its peak on January 26, 2018. Investors are a firesale and still buy despite the possibility of a trade war that worsens. (Photo: VCG)
Mainland China's stock markets look like a deadly bounce of mosses. A shares are on the rise, up about 3% from their lowest level this month, which is not bad, since they are down more 24% since January 26, 19659003] China faces $ 50 billion in tariffs and $ 200 billion that could be made public by the end of summer if trade talks with Beijing fail $ billions are at stake It is not known if it is 300 billion dolla rs at the top of the $ 200 billion that we look at now, or if it is $ 700 billion in all. That would mean that almost everything China sells to the United States would be taxed higher up at the border.
Earlier this month, well-known investor Mark Mobius said Trump's commercial tirades risked a global crisis. He said he suspected an additional correction of 10% on emerging market equities by the end of the year. Until now, emerging markets, led by China, have rebounded. New rates would be lower than that, at least in the short term.
Up to now, Wall Street has only considered commercial wars in the short term. Corrections of more than four hundred on the market were generally erased to a great extent in three trading days.
The Shanghai Composite Index is down 14% since July 13, but profit growth for large industrial enterprises is strong partly in the domestic market
See: This is that investors really think of Trump's commercial war – Forbes
Best frenemies? Trump called Xi his friend. But since his election, he has been relentless in his pursuit of US trade flows. (Photographer: Qilai Shen / Bloomberg)
Industrial profits rose 21.1% from one year to the next in May, the most recent data available, compared to 16.7% there a year ago. For the first five months of the year, the profits of the industry increased by 16.5%, about 1.5 percentage points higher than during the first four months of the year . Yet, for those who want to be negative about China, these figures are down 22.7% growth recorded in the first five months of 2017.
The slowdown in earnings growth is attributed to the growth of the economy. other financial conditions in China. Baidu, one of China's largest technology companies, will release its results this week. If they miss goals, look for them to highlight the credit conditions.
In the first five months of 2016, profits of Chinese enterprises increased by 6.4%, and during this period, profits declined slightly. China has been in swing mode for years. Investors seem to like the firesale they've seen in continental stocks and have been buyers. A shares were oversold in mid-July, bringing global investors back to China, based on EPFR Global tracking data released last week.
Industrial margins for the first five months of this year are the highest in 8 years for the same period, and the expansion of margins continued in May. Industrial value added increased by 6% in June compared with 7.6% a year ago and 6.6% in the second quarter, compared with 6.9% in 2Q17. Beijing will induce monetary and fiscal incentives in the second half as a detour along Trump's trade war against Xi.
"I still think that there is a high probability that Xi Jinping will follow the non-confrontational path, leading to negotiations with Trump who will resolve the bilateral dispute in the fall," says Andy Rothman, strategist in investment at Matthews Asia in San Francisco
"If I'm wrong, and the tariff dispute degenerates into a real trade war, there are key points to keep in mind," he says. First, the Chinese economy is no longer export-oriented, so the impact of a trade war will be modest. "
Net exports account for 2% of China's GDP, down from a peak of 9% in 2007. For most of China's economic growth and more than half of its GDP. [19659003] "The impact of Trump's import taxes will not be borne by Chinese companies," says Rothman. "It is also clear that Xi's government will step in to provide financial assistance to Chinese companies that are harmed by Trump tariffs, "he says.
Baidu publishes his findings on July 31. Photographer: Giulia Marchi / Bloomberg
Another thing that investors love about China right now despite the haircut : Beijing's stimulus measures are ready to be launched
Jian Chang says Barclays Capital options for the government to adopt a more expansionary stance to support growth As part of these options, it is likely that Beijin g will increase the size of the special bond program and will introduce more types of such bonds to raise funds from fixed income investors.
"They could increase spending for social programs such as health, education,"
Collectively, these expenditures account for about 7% of China's GDP compared to about 20% for the countries of the world. OECD
On the regulatory side, China will be careful not to impede growth because the supply chains can change because of tariffs already in place. Regulators will be aware of the fallout from the trade war.
Earlier this week, mutual fund firm Neuberger Berman issued a note to investors saying that they believed the liquidation of emerging market equities and bonds was exaggerated. And this only on the basis of valuation, investors would be back in the coming weeks.
