by John Cheng
Goldman Sachs Group Inc. raised its target for Chinese stocks, citing improving prospects for a US-China trade deal that would remove a key overhang for the market.
Referring to trading patterns seen in other countries “that have concluded trade agreements with the US in the past months, a potential US-China trade deal could be a market-clearing event for Chinese stocks,” strategists including Kinger Lau wrote in a note dated Monday.
The brokerage raised its 12-month target for the MSCI China Index to 90 from 85, implying an 11% upside from Friday’s close. Other tailwinds include an incrementally stronger currency, easing regulation risks for the private sector, and supportive market liquidity factors, the strategists said.
Chinese stocks have gained for three straight weeks as recently concluded trade deals in countries including Japan raised expectations for China to close similar agreements. US and Chinese officials are meeting Monday to extend their tariff detente beyond a mid-August deadline. Signs of a stabilization in geopolitical ties have also boosted sentiment.
Investors are also looking to the country’s Politburo meeting later this month to set the tone for policy measures in the second half of the year. While policymakers may not be in a rush to roll out aggressive stimulus, some supportive initiatives would likely come “toward back-end of this year” as weaknesses emerge, the Goldman strategists wrote.
Still, the rally is not without risks, given that the MSCI China Index has risen more than 25% so far this year. Goldman recommended focusing on individual stocks and raised its call on insurance and materials to overweight, funded by a downgrade in banks and real estate.
The measure climbed as much as 0.9% on Monday, before paring most of the gains, boosted by advances in health-care and financial shares.
Goldman strategists in May lifted their target for MSCI China back to levels before US President Donald Trump announced sweeping tariffs in early April, citing larger-than-expected levy rollbacks between the US and China. Since then, the gauge has risen nearly 8%.
Copyright Bloomberg News
Meanwhile, a father-son pair of advisors and ex-marines from ex-Edward Jones gives Kingsview its newest location in Arkansas.
New Vanguard and FINRA data show Americans increasingly vulnerable to financial shocks, with hardship withdrawals and cash-outs reaching a new high.
Many people have already continued working past their planned retirement date
A new analysis finds long-running fiscal woes coupled with impacts from the One Big Beautiful Bill Act stand to erode the major pillar for retirement income planning.
Caz Craffy, whom the Department of Justice hit with a 12-year prison term last year for defrauding grieving military families, has been officially exiled from the securities agency.
Orion's Tom Wilson on delivering coordinated, high-touch service in a world where returns alone no longer set you apart.
Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today's choppy market waters, says Myles Lambert, Brighthouse Financial.
