China ETFs cheer Beijing's stimulus move
China's CSI300 blue-chip index is up nearly 30% from its February trough
Bond ETF inflows hit new annual record
Kingsview Wealth Management CIO Scott Martin discusses the state of the U.S. economy and treasury and bond yields on 'The Big Money Show.'
Chinese stocks swept to their biggest single-day gains since 2008 on Monday, with domestic A-shares registering their highest ever turnover as investors scrambled to join a searing rally sparked by Beijing's latest raft of stimulus measures.
The move is juicing exchange-traded funds tied to China. The KraneShares CSI China Internet ETF rose, posting its best three-day stretch since the three days ending March 18, 2022, when it rose 39.31%, as tracked by the Dow Jones Market Data group.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| KWEB | KRANESHARES CSI CHINA INTERNET ETF - USD ACC | 29.86 | -0.83 | -2.70% |
| PGJ | POWERSHARES GOLDEN DRAGON HALTER USX CHINA PORTFOLIO | 25.20 | -0.34 | -1.33% |
Meanwhile, the Invesco Golden Dragon China ETF had its best three-day stretch since the three days ending March 18, 2022, when it rose 36.85%.
The blistering rally in Chinese stocks has come on the back of last week's most aggressive stimulus measures announced by Beijing since the pandemic, ranging from outsized rate cuts to fiscal support, in an attempt to shore up its ailing economy.
SPDR S&P China ETF
"China has clearly hit the panic button from an economic, monetary policy standpoint and stimulus standpoint, and you are seeing massive rallies in anything China related. We saw a rally in Japanese stocks earlier in the year and European stocks as well, but there is so much room to run on the international side," said John Petrides, portfolio manager at Tocqueville Asset Management, during an appearance on "The Claman Countdown."
China cut interest rates while also easing home-buying regulations. The People’s Bank of China also eased restrictions on capital requirements for banks.
US COMPANIES WITH CHINA TIES EXPOSED TO BIG RISKS
An investor pays attention to the stock market at a securities business hall in Fuyang, China, on Dec. 5, 2023. (Costfoto/NurPhoto via Getty Images)
Many traders, fearing they may miss out on the upsurge ahead of a weeklong holiday starting on Tuesday, helped lift the CSI300 index 8.5% at the close, taking its five-day gain to more than 25%, the strongest on record.
The broader Shanghai Composite Index recorded a total turnover of 1.17 trillion yuan, or $166.84 billion, and surged 8.1%.
The CSI300 blue-chip index is now up nearly 30% from its February trough, which by some market definitions suggests it is in a bull market, but much of the gains have happened very quickly and over a few sessions since last week.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| JD | JD.COM INC. | 34.68 | -0.70 | -1.98% |
| BABA | ALIBABA GROUP HOLDING LTD. | 83.19 | -2.38 | -2.78% |
| BILI | BILIBILI INC. | 18.23 | -0.60 | -3.19% |
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Chinese stocks or ADRs that trade in the U.S., including JD.com, Alibaba and Bilibili, also rose.
Reuters contributed to this report.