Why are China stocks a buy for US investors right now?

Philip van Doorn

Plus: Unusual action for the S&P 500, hot bond market and interviews with acting HUD secretary and AT&T chief operating officer

On Tuesday, People’s Bank of China Governor Pan Gongsheng announced a series of stimulus measures, which one economist called the central bank’s most important stimulus move since the Covid-19 pandemic. The Hang Seng HK:HSI index then hit a one-year high on Thursday after China’s Politburo said additional measures were being considered to support economic growth, according to a state media report.

On Friday, the Hang Seng Index rose 13% from a week earlier.

In this week’s ETF roundup, Isabel Wang described the renewed enthusiasm for exchange-traded funds that hold China stocks and talked to industry experts about what stimulus efforts could mean for investors.

More reports and reactions:

David Tepper is buying ‘everything’ in China: ‘ETFs… futures… everything’ China’s stock market surge could be ‘tradable growth’ – but approach with caution Commodity Corner: China’s stimulus plans trigger commodity price surge, but global soft landing still uncertain

Another good year for US stocks offers a warning

Through Thursday, the 2024 S&P 500 SPX was up more than 20%, excluding dividends. This follows last year’s increase of 24%. Joseph Adinolfi talked about the historical significance of this two-year winning streak and what it means for investors as they look to the future.

More information about markets:

For traders: Near-perfect stock market indicator shows ‘buy’ signal Investors see risk that inflation has not yet been beaten

Acting HUD Secretary Talks About Increasing Housing Supply

Aarthi Swaminathan interviewed Adrianne Todman, Acting Secretary of the U.S. Department of Housing and Urban Development, who spoke about new government initiatives to increase housing affordability.

Big move: we are empty nesters. Should we buy a house for cash – or take out a mortgage and invest?

Growing bond market

Falling interest rates provide a strong basis for bond prices.

Christine Idzelis talked about developments in the world of actively managed bond ETFs. Ciara Linnane shared surprising information about Boeing bonds. Here’s a detailed look at high-yield municipal bonds, including those issued to support the expansion of Brightline high-speed rail service in Florida.

Read more: Another reason why Qualcomm shouldn’t buy Intel? Its bonds could reach junk status.

AT&T has soared, explains the chief operating officer

Above is a chart showing the price movement of AT&T Inc. stock. (T) in the last three years. According to FactSet, the company’s stock closed at $21.65 on Thursday, up 29% in 2024, excluding dividends, and up 61% from its three-year closing low of $13.45 on July 18, 2023 , according to FactSet. This low follows a 2022 dividend cut as the company completed a complex deal to spin off WarnerMedia, which was merged with Discovery to form Warner Bros. Discovery Inc. (WBD).

AT&T pays a quarterly dividend of $0.2775 per common share, for a yield of 5.13% as of Thursday’s close. A falling interest rate environment could bode well for stocks with an attractive dividend, but the company’s chief operating officer, Jeff McElfresh, said in an interview with Emily Bary that AT&T’s focus on the business has helped even more.

Another way to expand AI

Nvidia Corp. (NVDA) dominates financial media coverage of hardware deployments in data centers to support their enterprise customers’ efforts to advance artificial intelligence technologies. That’s because Nvidia doesn’t yet face serious competition in graphics processors, which are large and expensive devices made up of thousands of parts.

According to Oppenheimer analyst Edward Yang, this is where the next opportunity for investors lies. He recommended the two stocks of companies that supply advanced chips needed by Nvidia and its competitors amid a “serious, structural shortage” of these products.

Related scope:

The analyst says Nvidia’s stock looks even better after the latest bullish signal. Micron stock may be having its best day in 13 years. What lies behind this great movement.

The ratings game

The Ratings Game column features daily commentary from analysts who explain current market action, taking a further look. Here are this week’s examples:

PayPal stock is having its best year since 2020 and that’s the main reason Costco’s sales are strong, but valuation ‘leaves no room for error,’ Alphabet analyst says Alphabet’s stock has never been this cheap compared to Meta’s. How to play it. Starbucks stock soars after update. The coffee chain is ready for a “big comeback”, says the analyst.

A bank manager explains the high valuation of shares

Steve Gelsi interviewed Dimitar A. Karaivanov, CEO of Community Financial System Inc. (CBU) of DeWitt, New York, who described the bank’s “unique” business model.

A look at CBU’s share price-to-book ratio in the 74-share group of KBW Nasdaq Bank Index BKX and KBW Nasdaq Regional Banking Index XX:KRX led to this screen: 11 preferred bank stocks that continue to trade at low valuations.

Retirement and estate planning

You’ve probably heard of an irrevocable trust, which can be used as an estate planning tool and for other purposes. But the word “irrevocable” can be unsettling because things happen in life and changes may need to be made. Beth Pinsker explains how irrevocable trusts can be amended.