East Asian equity indexes showed a V-shaped rebound in the morning after President Trump used Twitter to confirm the US-China trade deal is intact, after White House advisor Peter Navarro said the deal was over in a Fox News TV interview last night.
East Asian equity indexes showed a V-shaped rebound in the morning after President Trump used Twitter to confirm the US-China trade deal is intact, after White House advisor Peter Navarro said the deal was over in a Fox News TV interview last night. I’m a little surprised markets took the comments literally, as Mr. Navarro is a widely known China hawk and we had US Trade Representative Lighthizer’s Congressional testimony that the trade deal was on last week.
We know throwing China under the bus will be a key election strategy to placate the base, though it is apt to be more bark than bite. The US economy is in a fragile state that a trade war would only exacerbate and would jeopardize a Q3 rebound.
Hong Kong had a strong day led by volume leader Tencent +4.89%, Alibaba
BABA HK +3.29% and HKeX +2.7% after Hong Kong head, Carrie Lam, mentioned that ETF Connect could be coming, which would allow Mainland investors access to Hong Kong listed ETFs. Names worth noting include Meituan Dianping +3.7%, NetEase
NTES +2.55%, and Semiconductor Manufacturing +9.3% pre-STAR board listing for the semi company. One broker noted that Tencent is benefiting from a catch up/rotation after strong performance of e-commerce names. A mainland broker noted that Tencent’s PUBG Mobile game earned over $220mm in May +40% YoY as gamers globally are attracted to the game.
My brother in law, Matt, shared an institutional broker’s survey on where investors expect the Hang Seng to close year-end. Just over half of the respondents predicted a flat/down, though I am more optimistic due to the index changes coming.
