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The Chinese National Flag enters the financial area of Lujiazui in the background.
VCG | Visual China Group | Gets the image
A rally on Chinese actions from the beginning of the year has been encouraged by investors to predict that mainland actions will exceed their American peers in the fact that attractive assessments have caused the idea of ”American exceptionalism”.
Last week, the S&P 500 for the first time since 2023 slipped into the territory. Unlike the MSci Index, China has scored 19% since the beginning of the year, until March 9, according to Goldman Sachs, noting its best beginning of the year in history.
Contrast successes celebrate a quick turn just a few months ago when many Investors believed that the US was uniquely posted Contempt for economic and political storms affecting other countries. Chinese shares were also suffered from the normative hassle and problems of the Chinese economy.
Since then, a lot has changed.
US President Donald Trump’s tariff policy reflected on the economic slowdown in the world’s largest economy.
Meanwhile in China, Optimism around the country’s artificial intelligence opportunities Since the introduction of the R1 Deepseek model earlier this year.
“The US has a good period, and this is the end because Trump’s policy is very anti-Economy. China was a very bad period, but it seems to be recovering,” said Richard Harris, CEO of Port Shelter Investment Management.
“I call it a big turn. Obviously, in the last 5 – 7 years, the US markets have been dominant. Wonderful seven went to the moon … (but) it seems difficult to understand that it takes much more,” Harris said.
Nasdaq Heavy’s composite is also located in the correctional territory Dragged the sale in the beautiful seven stocksare due to the problems of the recession and the fears of the war trade. Gorgeous seven are composed Alphabet. Amazon. Apple. Meta. Microsoft. Nvidiaand Tesla.
China was not only in terms of investment, dead money for a long time, but also became anxiety and risks for financial advisers.
Michael Heide
Publisher of a leading lag report
“The capitalization of the US stock market, compared to the world capitalization in the stock market, made a peak at the end of last year among the then talk about” American exclusivity “,” said Chris Wood, head of the Jefferies Hong Kong Global Strategy.
In the same direction, the Eastspring Investments’ Joint Stock Portfolio, Asia Ken, believes that American exceptional trading ended earlier this year. It is expected that this year it is expected that Trump’s fiscal strengthening and tariff war will slow down the US economic growth up to 2%, Wong said by 2.2%compared to consensus estimates.
US saw Real GDP growth by 2.8% In 2024 compared to 2023, the US debt and deficit situation became more difficult During the first month as President Donald Trump, and he has been prioritizing since then, resolving the government’s financial issues.
Wun, Wong added.
This may mean that the US stock decline cannot be made.
“We see that Selloff in US shares as further,” Deutsche Bank wrote in a note published over the weekend. “With the uncertainty of trade policy, it will probably continue to weigh for at least April 2, we expect the positioning will continue to unwind.”
Speech S&P 500 last year
‘Moving below the position of positioning in which he went to the last trade war would accept S&P 500 Up to 5250, “said Binka Chadha Bank Chief Strategist. This will mark more than 7% of Monday’s closing at 5675.12.
On the other hand, China Tech shares were on the Smooth after the Deepseek breakthrough. The Chinese government also actively signals support for its technology sector, With plans to increase funding in cards.
According to LSEG, which has been transferred to Hong Kong, the Hang Seng Tech Index, which tracks some of the largest Chinese technology companies listed in Hong Kong, grew more than 30%.
“Investors should look for rallies in the US and buy fixes in Europe and China, where there is the most evidence of improvement of the basics,” said Wood CNBC.
Certainly, soon analysts at the Bank of America may foresee the correction soon.
“HSCEI/MSCI China’s performance over the last 17 million in the close path to the trajectory ten years ago makes us worry that we can approach some correction,” Bank’s Bank’s analysts wrote in a report published on Monday.
Bank analysts believe that there are “fundamental similarities” between the current cycle and 10 years ago in terms of stimulating the country’s policy and reforms, economic balance and technological breakthroughs.
Attractive estimates?
Head of Asian -Tsocan Academy Jpmorgan, James Sullivan. These estimates are extremely attractive compared to global counterparts in markets such as China, where investor positioning is still very low.
Currently, the MSci Index China is trading 13.38 times, projected annual profit, FactSet reports. This is compared to the S&P 500, which is traded 20.72 times, is forecast for annual profit.
“I think China’s market will exceed the US markets over the next four years and I don’t think it is relevant to Trump. I think this is due to the start of the assessment,” said Michael Gaid, publisher of the leading gap report, attributing his bull position to a large extent “huge insufficient” in China.
“China was not only in terms of investment, dead money for a long time, but also becomes anxiety and risks for financial advisers to even consider the confrontation for their customers who have invested in funds in China.”
The street signs hang near the New York Stock Exchange on Wall -Rate in New York on February 3, 2025.
Angela Weiss | AFP | Gets the image
In addition to cheaper estimates, other factors also feed the bullish impetus in Chinese markets. Harris said China’s shares were very oppressed, while the United States was over the last six years, Harris said.
“Of course, the average estimates will show such a difference,” he said.
“I’m not so worried about the assessment. This is important, but this is not a 100% factor. At the moment, it is more important that there is much more impetus on the Chinese market,” Harris said, adding this The Government of China’s Government Incentive entered the economy and markets.
In a report published last week, Citi Research has updated China to overweight, while reducing US shares to neutral because the US shutdown has stopped after overweight since October 2023, waiting for more negative prints from the country’s economy.
However, Citi claimed that his neutral forecast is a three-to-six-month look, emphasizing that the US would remain one of the leaders of the II, even if together with China.
“In the greater picture, we doubt that the AI bubble is already fully played,” the investment bank, led by Dirk Waller, wrote strategists.
