Hong Kong Stocks Are in a Bear Market, Another Sign of Trouble in China
Hong Kong stocks have entered a bear market, dropping 21 percent from their peak, as investor concerns about China's real estate sector and economic growth continue to escalate.
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Posted 8/18/2023, 8:06:58 AM
nytimes.com
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The U.S. stock market experienced a milder bear market in 2022 compared to historical bear markets, with a decline of 25% from its prior high, and history suggests that a new bull market is likely to follow soon.
China's stock market has experienced a bearish performance recently, with the benchmark stock index reaching a 9-month low, and there are concerns about the longer-term equilibrium interest rate highlighted by Fed Chair Powell's remarks at the upcoming Jackson Hole Economic Symposium.
Baidu's stock jumps as the tech giant surpasses analysts' earnings expectations, cutting through concerns over China's macroeconomic conditions.
Hong Kong's stock market has benefited from China's rapid growth, with over 1,400 Chinese companies raising $1.05 trillion in the past 30 years.
Hong Kong stocks rebounded as traders considered the recent market slump to be excessive, with Chinese tech leaders such as Alibaba, AIA, and NetEase leading the way.
China's economic slowdown, marked by falling consumer prices, a deepening real estate crisis, and a slump in exports, has alarmed international leaders and investors, causing Hong Kong's Hang Seng Index to fall into a bear market and prompting major investment banks to downgrade their growth forecasts for China below 5%.
The S&P 500 has recovered 65% of last year's bear-market drop, but when adjusted for inflation it is only about 45%, highlighting the diminished buying power and implying implications for the economy and future Federal Reserve policy.
Summary: Investing in growth stocks following the Nasdaq bear market dip could be a wise move, with Alphabet, Lovesac, Nio, and Baidu identified as top growth stocks that offer promising long-term outlooks and attractive valuations.
In a potential bear market, British American Tobacco, Johnson & Johnson, and Coca-Cola are three stocks that have the potential to beat the market due to their defensive qualities and strong potential for continuing profitability.
The recent market pullback has investors questioning if it's the start of a bear market or just a correction, but it's important to recognize that markets are inherently uncertain, and focusing on long-term goals and factors we can control is key to success in investing.
Hong Kong stocks rise on speculations of fresh capital market measures and expectations of banks cutting mortgage rates, while Chinese developers and Xiaomi contribute to the market gains.
Summary: As investors brace for the possibility of a bear market, three top stocks to consider are Hormel Foods, Walmart, and McDonald's, each of which has defensive businesses that can thrive in tough economic conditions.
Hong Kong-listed property stocks surged after China's People's Bank of China eased borrowing rules and cut the reserve requirement ratio for foreign exchange deposits, leading the Hang Seng Index to be the top gainer in Asia, with real estate companies such as Evergrande, Logan Group, and Longfor Group experiencing a spike in shares, and Country Garden Holdings leading gains at 14.61% up.
China's stock market rebound may be temporary as corporate earnings continue to decline and companies revise down their outlooks, causing concern for foreign funds and prompting Bank of America to urge caution.
Hong Kong stocks, including SMIC, Tencent, and JD.com, dropped as weak China trade data and a depreciating yuan put pressure on the market.
A bull market is expected to come after a bear market, and investors are advised to buy stock in Alphabet and Amazon, two companies that have recently split their stock and are likely to benefit in strong market times.
The article highlights four top-tier growth stocks, including Amazon, PubMatic, AstraZeneca, and Starbucks, that investors may regret not buying following the Nasdaq bear market dip.
Asian stock markets are starting to turn positive despite selling off shares in Chinese property developers and remaining unconvinced by efforts to revive activity in the mainland real estate market.
Asian stock markets fell as Wall Street experienced a decline, with investors preparing for key US inflation data, and a spike in oil prices added to concerns about persistent price pressures and the interest rate outlook.
Four growth stocks that investors should consider buying in the wake of the Nasdaq bear market dip are Walt Disney, Exelixis, Qorvo, and Palo Alto Networks.