The Chinese national flag flies with the Logiazawi Financial Zone in the background.
VCG | China Visual Group Gety pictures
A gathering in Chinese stocks since the beginning of the year leads investors to predict that the shares of the mainland will outperform their American peers in a sign that attractive assessments excel over the idea of ”American exceptional”.
Last week, the S&P 500 fell to a correction zone for the first time since 2023. On the contrary, the MSCI China index has gained 19 % since the beginning of the year, to March 9, according to Goldman Sachs, which represents his best to a year in history.
The contradictory wealth has a rapid shift only a few months ago when a lot Investors believe that the United States was in a unique position To overcome economic and political storms, it excels over other countries. Chinese stocks were also suffering from regulatory concerns and concerns about the health of the Chinese economy.
Many have changed since then.
The definition policy of US President Donald Trump has participated in an economic boom in the world's largest economy.
Meanwhile, in China, Optimism about the capabilities of artificial intelligence in the country Since the introduction of the R1's Deepseek model earlier this year.
“The United States has gone through a good period, and this ends because Trump's policies are very hostile to the economy. China was a very bad period, but it looks as if it began to recover,” Richard Harris, CEO of Port Shelter Investment Company, told CNBC.
Harris said: “I call it the great axis. It is clear that over the five to 7 years, the American markets were dominant. The wonderful seven of the moon went to the moon … (but) it seems that it is difficult to see that there is a lot that can go to,” Harris said.
The heavy nasdaq compound in technology is also in correction lands, It was withdrawn by a sale in seven wonderful sharesDifting of recession fears and fears of the trade war. The wonderful seven consists of alphabetand Amazonand appleand Deadand Microsoftand NafidiaAnd Timing.
China was not only from the point of view of investment, or dead funds, for a very long time, but it has also become a source of anxiety and risk to financial advisers.
Michael Jays
Publisher of the LEAD-Lag report
“The American market value of stocks, with regard to the global market value of securities, has ever achieved its climax at the end of last year amid the prevailing talk about” the American exception. “
In the same manner, Ken Wong, an Asian -stock portfolio in Eastspring Investments, believes that the exceptional American trade ended earlier this year. Wong said that the Trump's identification war in Trump is expected to slow down the economic growth in the United States to less than 2 % this year, compared to unanimity estimates of 2.2 %.
He saw the United States Real GDP growth by 2.8 % In 2024 compared to 2023, the US debt and its inability Become more severe During the first month of President Donald Trump, since then, he has given priority to addressing government financial issues.
Wong added that the recession is a major danger in the United States, as the tariff war can reduce economic activity to the extent of recession with an increase in inflation at the same time.
This may mean that the decline in American stocks may not be done.
“We see the sale of shares in the United States as more,” Duetsche Bank wrote in a note published during the weekend. “With uncertainty in commercial policy is likely to continue in weight, at least until April 2, we expect the sites to continue to relax.”
S & P 500 performance last year
“The transition to the bottom of the GPS that went in the last trade war, will take S & P 500 Pinka Chada, chief strategic expert in the bank, said to 5,250.
On the other hand, the shares of China Tech have been rupture since Deepseek. The Chinese government also actively indicated its support for the technology sector, With plans to increase financing in the cards.
The Hang Seng Tech, which tracks some of the largest Chinese technology companies listed in Hong Kong, has increased more than 30 % since the beginning of the year, according to LSEG data.
“Investors should look forward to selling gatherings in the United States and buying corrections in Europe and China, where there is the largest evidence of improving basics,” Wood told CNBC.
The huge pace of China's gathering can be transferred soon, according to analysts at Bank of America.
Analysts at Bank of America wrote in a report published on Monday: “The HSCEI/MSCI China performance in the past 17 years is closely directed to the path a decade ago, which makes us concern that we may come close to some correction soon.”
The bank analysts believe that there are “basic similarities” between the current session and 10 years ago in terms of the country's political motivation and reforms, economic balance and technological penetration.
Attractive reviews?
President of JPMORGAN in Asia and Pacific Shares Research, James Sullivanand The aforementioned assessments are very attractive to global counterparts in markets like China, where the location of the investors is still very low.
The MSCI China index is currently trading at 13.38 times its expected profits for one year, according to FactSet. This compares with the S&P 500, which is circulated at 20.72 times of profits for one year.
“I think the China market will outperform the American markets for the next four years, and I don't think it is about Trump. I think it is about the start of the evaluation,” he said. Michael Ged, publisher of the Lead-Lag report, is largely due to a “massive investment” in China.
“China was not only from the point of view of investment, or dead funds, for a very long time, but it has also become a source of anxiety and dangers on financial advisors even thinking about a contradictory bet for their customers who invest in China funds.”
Street marks are hanging outside the New York Stock Exchange in Wall Street, New York on February 3, 2025.
Angela Weiss AFP | Gety pictures
Regardless of the cheapest assessments, other factors are also nourishing the bullish momentum in the Chinese market. Harris said China's shares have been completely depressed for some time, while the United States has been full of tear over the past six years or so.
“Of course, the average assessments will appear like this,” he said.
“I am not very worried about the evaluation,” Harris said. “It is important, but it is not a 100 % factor. What is more important at the moment, is that there is more momentum in the Chinese market,” Harris said. China government government I stumbled in economics and markets.
In a report released last week, Citi Research promoted China to overweight, while reducing American stocks to neutral because the American exception has stopped temporarily after weight gain since October 2023, with more negative data prints of the country's economy.
However, Citi emphasized that its neutral outlook is three-to six months, with a focus that the United States will remain one of the leaders of artificial intelligence, even if it is shared with China.
“In the biggest picture, we doubt that the artificial intelligence bubble has already been played already,” strategists at the Investment Bank, led by Dirk Willer, wrote.
