Will the next quarter US corporate profits cycle be the death knell we have been waiting for?
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10/06/21 10:53
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As forecasts of a luxury consolidation grow ever louder, Xiaolin Chen, head of international at KraneShares, tells IGTV financial analyst @AngelineOng why higher-end names like Hermes, Gucci and Dior will still do well. Angeline Ong | Financial Analyst, Presenter and Content Editor, London | Publication date: Tuesday 03 October 2023 14:04 (Video Transcript Summary) Chinese overseas spending set to rise Dr Xiaolin Chen from KraneShares speaks to IG financial analyst Angeline Ong about the current trends in China's consumption and luxury stocks. Dr Chen says that while many Chinese people are choosing to travel within China during the Golden Week holiday, overseas spending is expected to decrease. This could be because of personal preferences and travel restrictions. However, Dr Chen believes that Chinese people will continue to travel abroad for holidays in the future. When it comes to luxury stocks, Dr Chen explains that Chinese households have become wealthier, leading to more spending on luxury brands. Chinese consumers now prefer more expensive and exclusive luxury brands, and they are also buying from local Chinese brands. The price difference between luxury brands sold domestically and abroad has decreased, making shopping locally more appealing. K-Lux fund targets luxury brands Dr Chen says popular luxury brands like Hermes, Gucci, Dior and Chanel are loved by Chinese consumers. However, she noted that these brands may have had a temporary increase in revenue after reopening and might need to make some adjustments now. She also mentions that the growing middle class in China, comprising some 700 million people, is a significant consumer base for both high-end and more affordable luxury brands. To target this market, KraneShares has launched a fund called K-Lux. Using cleaner energy alongside fossil fuels In terms of the energy sector, Dr Chen talks about the global shift toward decarbonisation and the role of oil and fossil fuel companies. She acknowledged the challenges of balancing the transition to cleaner energy sources with the continued use of fossil fuels. Dr Chen highlights China's commitment to reducing carbon emissions and mentions that the country is investing heavily in green energy technologies. Dr Chen also discusses the inflow of investments into Chinese equities. Since Chinese A-shares were included in global indices in 2018, there has been a positive net inflow of investments each year. Despite some mixed economic data and outflows in 2023, institutional investors have shown confidence in the Chinese market by strategically positioning themselves for long-term allocations. Dr Chen believes that with supportive policies and positive data releases, investor sentiment toward Chinese equities will improve in the coming months. This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary. -
While recession fears largely evaporated in 2022 and 2023, IG market analyst Pablo Gil tells IGTV’s @AngelineOng why 2024 will be a year of reckoning for investors, and how to position for this. Angeline Ong | Financial Analyst, Presenter and Content Editor, London | Publication date: Tuesday 03 October 2023 11:07 (Video summary) The global market forecast: recession looms, dollar soars IG analyst Pablo Gil and IGTV presenter, Angeline Ong, dive into the current global market situation, touching on sticky inflation, strikes happening worldwide, and the struggle of central banks to control inflation. Pablo believes that the impact of the fight against inflation won't show until 2024, and a recession could become a real concern within the next six to eight months. To explain why, he points out consumer-related indicators that reveal a weakening consumer due to the cost of living crisis and inflation crunch. For example, things like consumption and credit defaults are showing signs of decline. Market predictions for 2024: sell-offs and weakening demand Looking ahead to 2024, Pablo predicts certain market effects, such as sell-offs in the equity market, a stronger dollar, and reduced commodity prices. These predictions stem from the expectation that consumption and global demand will decrease. However, he cautions that once the recession hits, inflation won't be the main concern anymore. Instead, the lack of growth and its impact on the labour market will become a pressing issue. To add to the complexity of the market landscape, Pablo and Angeline touch upon geopolitical tensions between the US and China, as well as tensions between the BRICs (Brazil, Russia, India, China) and G7 countries. They highlight that globalisation dynamics are changing, with different perspectives emerging from countries like China, Russia, and Middle Eastern nations. Geopolitical risks are on the rise and are unlikely to be resolved in the near future. Overall, this video provides valuable insights for those looking to understand the current global market situation in a more accessible and engaging manner. This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
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Signs of strength in Nasdaq 100 but Dow and DAX struggle to make progress Indices suffered further losses on Monday but have recovered slightly today, with the Nasdaq 100 showing the way. Source: Bloomberg Chris Beauchamp | Chief Market Analyst, London | Publication date: Tuesday 03 October 2023 11:58 Dow struggles after tough Monday Losses continued here despite the resolution of the US government’s funding problems. The index touched a four-month low in Monday’s session, and has shown no sign yet of forming a low. Friday’s rejection of the 200-day simple moving average (SMA) provided a fresh bearish catalyst, and for now further declines seem likely. A drop below 33,230 would mark a new bearish move and open the way to the 32,700 level that was last tested in May. A rebound above the 200-day SMA might help to suggest that a low has formed for the time being. Source:ProRealTime Nasdaq 100 pushes higher The buyers emerged in this index over the previous three four sessions, with bargain-hunting helping it to outperform other major US indices on Monday. This may be a sign of risk appetite re-emerging; a close above the 100-day SMA would help to solidify this view, but in the short-term a rally all the way back above 15,400 is needed to break trendline resistance from the July highs. A reversal back below 14,700 might suggest the sellers will attempt another move to push the price below last week’s lows, when the 14,550 level was staunchly defended. Source:ProRealTime DAX fights to hold near support The rebound of Thursday and Friday fizzled out on Monday, with the index returning to the 15,200 support zone. It now finds itself balanced right on support, with the March lows around 14,700/14,800 next in view in the event of further losses. Having fallen below support around 15,700 and then 15,500, the sellers remain firmly in control of the index. In the short-term, a close above 15,650 would be needed to pierce trendline resistance from the July record high. Source:ProRealTime
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