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BlackRock Says China Stocks Are 'Bubbling Around' the Bottom

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Bloomberg Sep 26 05:37 · 29k Views

Helen Jewell, BlackRock's EMEA CIO of fundamental equities, discusses the outlook for Chinese stocks following Beijing's fiscal and monetary efforts to stimulate the economy. "They might pop down a bit before they go up, but they're kind of bubbling around where I'd see the bottom might actually be," Jewell says on on Bloomberg Television.

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Transcript

  • 00:00 What's really important about China, obviously for European stocks, very, very important and we're seeing that today.
  • 00:05 But I wouldn't
  • 00:06 be surprised if tomorrow we see a little bit of a pullback because that's what's happening in the markets right now.
  • 00:11 You end up risk on one day, risk off the next day and you're seeing
  • 00:15 that a lot of uncertainty in the markets.
  • 00:17 They absorb information like this and they go up a lot and then the next day it feels like they pull back.
  • 00:22 Having said that, in terms of China directly, yes, I think there is a place for that in a global portfolio.
  • 00:27 And
  • 00:28 this is something we've seen in the last month or so.
  • 00:30 We have seen a bit of a rally in China and and today is a real reminder
  • 00:33 that
  • 00:34 with China, there is always a floor level to those stocks and those names.
  • 00:37 There will always be some stimulus coming through.
  • 00:40 And I think people forget that the valuations got incredibly low.
  • 00:43 And So what we did see is a little bit more of adding to the portfolio, not a huge amount.
  • 00:46 This is not an area that I'm saying guy lead into massively.
  • 00:49 Yeah, but let's not remember the floor level that you do get.
  • 00:52 So you think Chinese stocks have bottomed?
  • 00:53 You think you think that the stimulus is now
  • 00:56 commensurate with the idea that a floor has been put into these stocks?
  • 00:59 Yes, yes, I do.
  • 01:01 Yes, I do.
  • 01:01 But the Chinese economy is still pretty fragile.
  • 01:03 I think that's the other thing I would take out of this.
  • 01:05 Let's have a look at the economy versus the stocks.
  • 01:07 The stocks on evaluation were very, very low.
  • 01:10 The economy is still looking quite fragile.
  • 01:12 And that's why again, you
  • 01:13 know, normally I come here and I'm very positive on the story around a lot of example, the luxury goods names.
  • 01:19 We still need to be a little bit cautious of exactly how much influence that the China stimulus and the China upside really can have in certain terms of support in the economy.
  • 01:28 The valuations where you do get the support at the moment in terms of the stock level,
  • 01:32 they have come up a little bit.
  • 01:33 So whether they might pop down a bit before they go up,
  • 01:36 but I think they have kind of they're they're bubbling around where I see the bottom might actually be.
  • 01:40 So
  • 01:40 disaggregate what you see in the stock market from the economy.
  • 01:44 And again, I don't want to sound too negative, but I think there are so many of these drivers we've got at the moment, whether it's the US election, whether it's the AI story, whether it's the macro uncertainty where you see the market in one day being so
  • 01:54 up and bubbly and positive and then the next just risk off.
  • 01:57 It's it's quite a confusing market to be in.