Why China's Stocks Are Exciting Investors: 3-Minute MLIV

Watch Why China's Stocks Are Exciting Investors: 3-Minute MLIV - Bloomberg on Dailymotion

Transcript

00:00We haven't touched on the China data yet because it could have been a strong set of data when it comes to industrial profits.

00:05And the equity market performance continues to push higher in mainland China and Hong Kong.

00:10Paul, what are the future catalysts? How are markets adapting to the reality on the ground in China?

00:18Yeah, hi, good morning, Tom. So with plenty of enthusiasm today and for most of the recent months as well,

00:24we've got a 2% gain or less on the Hang Seng so far and gains in the mainland stocks as well.

00:32People are looking at the numbers for industrial profits over the weekend, which showed a big jump,

00:36a much stronger profile than in recent months, seeing the benefits of China's anti-involution program starting to come through

00:43where they're trying to reduce hostile cutthroat competition in the mainland in order to allow companies to, you know,

00:50make a profit, increase their margins essentially. But that's just a tiny part of the bigger overall picture where, you know,

00:56China is starting to really register again in the international investor shopping list.

01:01People are paying attention because they like these reforms in the markets.

01:05They also like the fact that China is showing much more exciting kind of growth in terms of AI, robotics, other high technology

01:13stock market companies. And on top of that, some of the political face-off between President Trump and Xi is also starting to fade.

01:23And so we're seeing investors that have been staying away for four years, you know, ever since we had that big crackdown,

01:28which you'll recall, Tom, on the property sector, on the financial technology sector. That's all starting to fade away.

01:36And because the market is so strong, even those investors that hadn't previously paid attention are being forced to capitulate

01:42and join in on that rally. We've got a holiday coming up in a couple of days' time, so people want to get in there before the market's shut.

01:49Paul, speaking of getting in there before the market shut, we're talking about a government shutdown on the other side of the Pacific there

01:55when it comes to the United States. There's also a question of should a shutdown hit in less than 48 hours,

02:00do we get jobs data come Friday? What is the market reaction to no data at all?

02:06Well, that would be interesting. I mean, that will put a lot more weight on the private indicators like the ADP,

02:13which we still will get for the jobs data. But really, the market has been looking to these numbers to really clinch

02:19the Federal Reserve interest rate decision that we get at the end of October to give us a stronger gauge of whether they will act

02:26with another cut two months in succession. The jobs data has been the key factor the policymakers angling for cuts have been leaning on.

02:35So without that information, it's going to make it very hard for us to tell what the path will be from here.

02:43Paul, what do you think of this rally in gold this morning, up 1.5% to start Monday?

02:47Yeah, gold just continues to go from strength to strength, not just gold, but the miners as well.

02:54We've got some IPOs coming through, which are looking strong, too. The market is really leaning into that,

02:58leaning against currencies as an alternative asset. You know, it's still hot.

03:03China continues to buy, and that's driving the market higher.

03:05China continues to buy.

03:15China carries.

03:27China has.