Remember the folks who called China uninvestable? it seems they are now buying big into Chinese tech with BABA and JD their strong picks as their analysts has upgrade the target prices and turned them into BUY calls
Like what I said previous, China has its slow down in the 1st half of 2022 and I believe the worst is over… the 2nd half of 2022 would be the recovery mode… with China keeping inflation in check due to their huge reserves of commodities like oil, metals and grains… anytime energy/food prices goes out of control the CCP can draw down from reserves to flood the market and cool domestic prices down… CPI for China is expected to be around 3% for 2022
Whereas the West is facing an inflation problem that is spiraling out of control… inflation has not peak and is looking to touch the 9% levels for US before stagnating for the 2nd half of 2022… yes inflation is expected to remain high for the entire year of 2022~! A recession is almost a sure thing for Europe and US that’s why I do not want to have any exposure to the west.
The trend is clear as the US market continues to trend downwards.. I believe this down trend will continue for the remaining second half of 2022… any rallies you see will be short lived.. aka dead cat bounce… the problem is so big and there are no easy solutions… US must head into a recession to lower demand and bring inflation down, US companies will report weaker earnings for Q2 and Q3 due to one off costs in laying off staffs as well as write down on investment losses.. restructuring costs… the weak earnings will double pull both the PE.. price down.. earnings down… a double whammy for US stocks