Emerging Trends: Stocks, Sectors & Styles

September 29, 2024

KEY THEME: our Buys on China Tech 6 weeks before the stimulus illustrate what AI should do: forecast the non-obvious...

A. BUYS ACROSS CHINA DESPITE THE UNCERTAINTY BEFORE THE ANNOUNCEMENT

• China's central bank boosted the economy with rate cuts and liquidity injections - resulting in a massive 32% rally within a week
• Nobody knew (and neither did our AI) that there would be positive developments in China! No investor knew it!

HOWEVER

B. CHINESE STOCKS WERE ESSENTIALLY PRICED FOR AN ECONOMIC COLLAPSE

• capital inflows signaled a turn before the policy shift:Buy on China Tech since Aug 22, 2024Buy on China Internet Index on Sep 19, 2024
• Buy on China Healthcare since Sep 12, 2024
• Large-Cap Buys: BABA, BIDU, Tencent
• Small-Cap Buys: AutoHome, Xunlei
• institutional money is flowing not only into major tech names but also into sectors like auto-tech and green energy, highlighting broader market recovery

C. THE RALLY IN CHINA STARTED WITHIN THE CONTEXT OF OVERSOLD EMERGING MARKETS

• with the exception of India and South Africa, all major EM indices have vastly underperformed this year
• consistent with a weakening US$ - Sell on the Trade-Weighted USD - making Chinese assets more attractive globally
• these inflows into China align with Buys on Crude Oil, Uranium ETF, Rare Earth Metals ETF & European luxury stocks (LVMH, Hugo Boss, Burberry)

Curious to explore our latest charts with forecasts?

Message me your email, and I will send you the latest forecast.