Saturday, October 5, 2024

📌 Your End-of-Week Bulletin - October 5, 2024

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Manward Digest
 

An Uncertain U.S. Market Has Us Looking East

Alex Moschina

Alex Moschina
Publisher

Markets bucked the trend in September, putting in a positive return during a month that has a history of turning sour for stocks.

Now October is off to an odd start.

Markets seem unsure what to make of Tuesday's VP debate and yesterday's blockbuster jobs report.

We already riffed on the debate. But the latest numbers from the Bureau of Labor Statistics deserve some attention.

Economists were expecting new payrolls in the ballpark of 150,000. So, it was a big surprise to see the labor market actually added 254,000 jobs in September.

That's quite a jump.

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And so, on Friday, Wall Street reckoned with the notion that the jobs market - and the economy as a whole - may be stronger than previously thought.

The question now is... will that idea have an impact on the Fed's plan to continue lowering rates over the months ahead?

Time will tell.

But rather than speculate about what's next for the U.S. (a dangerous pastime), this week we've opted to look East...

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Chinese Stocks in Overdrive

Shah kicked things off on Monday with comments on the recent rise of the iShares China Large-Cap ETF (FXI).

Chinese stocks rose by double-digits after the powers-that-be nudged institutions to support the market.

Year-to-date, the FXI has risen more than 50%.

It's dwarfed the performance of its U.S. counterpart, the iShares Core S&P 500 ETF (IVV).

iShares Core S&P 500 ETF

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To take a closer look at the trend, Shah zoomed in on two key Chinese companies - Baidu (BIDU) and Alibaba (BABA).

You probably know Baidu as the "Google of China." Alibaba is its Amazon.

Both stocks have seen tremendous gains over the past month. Baidu is up 32% while Alibaba has risen close to 40%.

But after such big runs, investors are wondering whether the most significant gains are now behind us. To help answer that question, Shah picked them each apart for this week's edition of Buy This, Not That.

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As for whether the good times will last for Chinese stocks in general...

Shah has some concerns...

I'm not optimistic China will be able to reconcile the trillions of dollars of deeply embedded debt on the books of Chinese households, businesses, banks, and government institutions.

And as far as Chinese stocks soaring thanks to short-term buying schemes, all I can say is enjoy the ride while it lasts.

 

You can read his full analysis here... or keep scrolling for links to everything we published in Total Wealth this week.

Have a great weekend,

Alex

Week in Review

 

Monday Takeaways: Going Nuclear

Three Mile Island Nuclear Power Plant

Microsoft is going all in to power its AI demands… and Amazon just purchased a data center site right next to a nuclear plant. Nuclear's back, baby. Here's what Shah's looking at...

Sometimes a Rate Cut Is Just a Rate Cut

Interest rate regulation concept

A 50-basis-point rate cut has historically meant a recession is coming… so why is this time different? Keep reading...

Buy This, Not That: Which Is Hotter... BABA or BIDU?

SHENZHEN BAY STARTUP PLAZA

The Chinese government will do its very best to juice its economy... and Chinese blue chips have launched skyward. But what rocket should you ride higher? Get Shah's take here.

Dealmaker's Diary: A Power Player That's Shockingly Undervalued

Electricity_pylon

This infrastructure leader has phenomenal numbers… is in a critical industry… and is shockingly undervalued. Get the ticker here.

The Problem With China's Stimulus Deal

Unfinished building - Chinese flag

China has a big problem… and the government's Hail Mary may not fix it. Keep reading...


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Alex Moschina

Alex Moschina is the Publisher of Manward Press. A gifted writer, editor and financial researcher, Alex's career in publishing began more than a decade ago when he worked at one of the world's leading providers of academic research and reference materials. Alex first cut his teeth in the realm of investing when he joined the team at White Cap Research in 2010. There he was charged with covering emerging market trends and investment opportunities. A stint as senior managing editor and editorial director at the prestigious Oxford Club followed. A frequent speaker at conferences and events, Alex has led educational workshops across the U.S. and Canada.

 

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