Buy Chinese Stocks and Sell Big US Tech Brands, BofA's Hartnett Says
The numbers of strategists turning bullish on Chinese stocks is growing more by the day, with $Bank of America (BAC.US)$'s Michael Hartnett the latest to recommend the nation's equities as a top buy for 2023.
China's economic reopening is expected to boost equities as households have excess savings, according to strategists led by Hartnett in a Nov. 22 note, adding that the end of Covid restrictions boosted stocks in the United States and other countries previously.
The calls come amid a sharp rebound in Chinese stocks, with the MSCI China Index up about 19% this month and the Hang Seng Index entering a bull market following China's government's surprise policy shifts. MSCI Inc.'s index is still down 33% this year even after the recent rally.
Hartnett also recommended selling US tech stocks among their top 10 trades for 2023. Tech is still over-owned, even after a 28% slump for the Nasdaq 100 Index this year, they said. Heavyweight tech companies -- valued on future earnings potential -- will suffer as the era of easy monetary policy is over, while also facing risks from more regulation, according to Hartnett.
While rising interest rates have hammered tech stocks this year, unprofitable tech firms have been hit harder. It's a sharp reversal from the steady rise they experienced during the pandemic, when economic stimulus and the Fed's easy-money policies fueled a rush of speculative buying.
Analyst estimates also reflect an increasingly negative view on US tech. The sector is now expected to see earnings contract in 2023, down from expectations of 3.8% earnings per share growth as recently as mid-October, according to Gina Martin Adams, chief equity strategist at Bloomberg Intelligence.
Source: Bloomberg
Disclaimer: Past performance can't guarantee future results. Investing involves risk and the potential to lose principal. This article is for information and illustrative purposes only.
Disclaimer: Moomoo Technologies Inc. is providing this content for information and educational use only.
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HopelessChi : why excess saving? the lockdown destroyed livelihood and unemployment is reaching ATH? stimulus is nothing? RRR cut is temporary, debt piled up is significant? I see no catalyst and only negative for china
shy Cormorant_6589 : Are you all right? Buy A shares???
Eric1623 HopelessChi : They are convincing us to sell so that they can pickup cheap shares in our hand and taking profits on Chinese stocks they bought at significant low prices![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
Tonnesen98 : Niooooooo
小粉红的papa :![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
50 cent : No thanks, Xi thought made me think twice about investing in China, Capitalism with communist Chinese characteristics.
quiet Dinosaur_5037 : It should be teacher Cai who recommends Chinese stocks in the first place.
Silverbat : His “boys “ might have loaded up Chinese stocks and anxiously to unload bef upcoming ca·tas·tro·phe in China.
Silverbat : Are his clients shorting AAPL, NVDA, TSLA,TSM, NFLX,COST,WMT,……?
JMula HopelessChi : Unemployment is at an ATH?! Source?
Last I checked it was 3.7% which is pretty low.
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