Home > World Business
Goldman Sachs Likes Chinese Stocks As US Recession Fears Rise
Employees use sewing machines on a garment production line at Alibaba's smart factory in Hangzhou, China.Photographer: Qilai Shen | Bloomberg
July 2nd, 2022 | 16:17 PM | 324 views
UNITED STATES AMERICA
Chinese equities will be a bright spot as the fear of a global recession sends shares from the rest of the developing world spiraling, according to Goldman Sachs Group Inc.
Emerging-market stocks could dive another 8% to 15% if the US tumbles into a recession, according to an analysis of previous selloffs. That leaves a pocket of opportunity in the MSCI Inc. gauge of Chinese shares, which could get a boost from improving macroeconomic indicators, said strategists Caesar Maasry and Jolene Zhong in a Friday report.
“Despite market concerns regarding a potential US recession, we expect Chinese equities to remain driven by domestic activity and to be uncorrelated with the rest of the EM complex, at least in the short-term,” they wrote.
MSCI’s key emerging-market index has declined about 19% so far this year as investors juggle concern about rampant inflation and the central bank measures to combat it.
Those losses are short of the average 26% decline typically seen when the S&P 500 Index drops at least 10%, according to Goldman Sachs. The S&P 500 is down about 20% from its peak in January, the threshold for a bear market.
Source:
courtesy of BLOOMBERG
by Mary Biekert
If you have any stories or news that you would like to share with the global online community, please feel free to share it with us by contacting us directly at [email protected]