China / US Stock Markets Divergence

By: Nadeem_Walayat

After having tracked each another quite closely since the pandemic low, Chinese stocks started to diverge during March 2021. The mania infected investors in US markets look to strong US GDP growth of +6.3% and strong earnings growth of 49% as reasons to ignore the lofty price earnings multiples, crazy valuations for trillion dollar corporations and even more for the mid cap tech stocks that are the darlings of the likes of ARK Invest, trading on bubble valuations that are literally straight out of the dot com bubble era where just as was the case then many don't even make a profit and a large percentage of which never will!

Yes +6% GDP and +50% earnings growth is fantastic, but China's GDP for the same period is +18% GDP and earnings +84%! Many are fixating on the risk of regulation as the CCP appears to be stamping down hard on its tech giants thus prompting the exodus of foreign and domestic investors as they suddenly perceive the CCP is about to kill off the likes of Baidu, Alibaba and Tencent which has prompted many stock youtubers even those who should know better to get sucked into the all prevailing doom and gloom/

The reason why I mention this because when it is a actually a good time to buy stocks you get this kind of fear mongering that scares the poop out of investors from actually buying. I am immune but the reaction in the comments to my analysis of several weeks ago suggests that many are not and do get influenced by 'social' media following the likes of clueless Cathy Wood' who's funds apparently bought chinese stocks at their highs and then sold at their recent lows!

So a recap of what my analysis concluded in that chinese stocks had crashed to levels where I would start buying with initial buying levels for Alibaba at $203 or better, Baidu at $182 or better and Tencent at $57 or better, and in the week following my analysis all of those buying levels were achieved and so I bought and I am seeking to buy more as the stocks fall with price limits and alerts for Alibaba at $183 and $158, Baidu at $147 and $130. Though these will be on the Hong Kong exchange so I cannot just leave limit orders as ii.co.uk only allow 1 day limits on HK orders. Whilst I won't be adding to my Tencent buy. Remember folks I consider these HIGH RISK stocks for the fact that we are dealing with CHINESE stocks and the CCP, so we have to assume that there are many significant potentially negative variables at work that we are unaware of.

So as things stand should Alibaba and Baidu continue to tumble then I WILL buy more, and I am especially heartened by the fact that most investors by virtue of a clueless media are too fearful to buy, which means this should be a good time to buy stocks at fair valuations.

This article is an excerpt from my recent extensive analysis AI Stocks Portfolio Buying and Selling Levels, Bubble Valuations 2000 vs 2021 was first been made available to Patrons who support my work. So for immediate first access to ALL of my analysis and trend forecasts then do consider becoming a Patron by supporting my work for $3 per month that is soon set to increase to $4 per month for new Patrons, so a short window of opportunity exists to lock in at $3 per month now before the price hike. https://www.patreon.com/Nadeem_Walayat.

Content:

• Stock Market Bubble Valuations 2000 vs 2021
• Microsoft to the Moon - OUCH!
• CISCO to the Moon - OUCH!
• INTEL to the Moon - OUCH!
• Tech Stocks in a Bubble today?
• China / US Stock Markets Divergence
• AI Stocks Portfolio Buying and SELLING Levels
• AI Stocks Portfolio Buy / Sell Table Update
• High Risk Stocks
• Market Oracle AI Coin Mothballed
• Global Warming Code RED

Including access to my most recent extensive analysis :

Silver Price Trend Forecast October 2021 to May 2022, CHINOBLE! AI Stocks Buying Plan

• UK Inflation Soaring into the Stratosphere, Real rate Probably 20% Per Annum
• The 2% Inflation SCAM, Millions of Workers take the Red Pill
• Silver Previous Forecast Recap
• Gold Price Trend Implications for Silver
• Silver Supply and Demand
• Silver vs US Dollar
• Gold / Silver Ratio
• SILVER Trend Analysis
• Long-term Trend Analysis
• Formulating a Trend Forecast
• Silver Price Trend Forecast October 2021 to May 2022
• Silver Investing Strategy
• SIL ETF - What About Silver Mining Stocks?
• Gold Price Trend Brief
• Why the CCP is Living on Borrowed Time and Needs a War
• Understanding the Chinese Regime and What it is Capable Of
• Guanxi
• Chinese People do NOT Eat Dogs Newspeak
• CHINOBLE! Evergrande Reality Exposes China Fiction!
• AI Stocks Portfolio Investing Strategy
• AI Stocks Portfolio Amendments
• AI Stocks Portfolio Current State
• October Investing Plan
• HIGH RISK STOCKS INVEST AND FORGET PORTFOLIO
• Why China Could Crash Bitcoin / Crypto's!
• My Next Analysis

Also my recent extensive analysis on the prospects for the stock market into Mid 2021 see - Stock Market FOMO Hits September Brick Wall - Dow Trend Forecast Sept 2021 to May 2022

Contents:

• Stock Market Forecast 2021 Review
• Stock Market AI mega-trend Big Picture
• US Economy and Stock Market Addicted to Deficit Spending
• US Economy Has Been in an Economic Depression Since 2008
• Inflation and the Crazy Crypto Markets
• Inflation Consequences for the Stock Market
• FED Balance Sheet
• Weakening Stock Market Breadth
• Why Most Stocks May Go Nowhere for the Next 10 Years!
• FANG Stocks
• Margin Debt
• Dow Short-term Trend Analysis
• Dow Annual Percent Change
• Dow Long-term Trend Analysis
• ELLIOTT WAVES Analysis
• Stocks and 10 Year Bond Yields
• SEASONAL ANALYSIS
• Short-term Seasonal Trend
• US Presidential Cycle 
• Best Time of Year to Invest in Stocks
• 2021 - 2022 Seasonal Investing Pattern
• Formulating a Stock Market Trend Forecast
• Dow Stock Market Trend Forecast Sept 2021 to May 2022 Conclusion
• Investing fundamentals
• IBM Continuing to Revolutionise Computing
• AI Stocks Portfolio Current State
• My Late October Stocks Buying Plan
• HIGH RISK STOCKS - Invest and Forget!
• Afghanistan The Next Chinese Province, Australia Living on Borrowed Time
• CHINA! CHINA! CHINA!
• Evergrande China's Lehman's Moment
• Aukus Ruckus

Including access to my recent extensive analysis updating AI stocks buying levels as we head towards the window for a significant correction even a possible stock market crash.

Stock Market FOMO Going into Crash Season, Chinese Stocks and Bitcoin Trend Update

• FOMO Fumes on Negative Earnings
• Cathy Woods ARK Funds Performance Year to Date - Chinese Stocks Big Mistake
• INTEL The Two Steps Forward One Step Back Corporation
• AMD Ryzen 3D
• New Potential Addition to my AI Stocks Portfolio
• Why is Netflix a FAANG Stock?
• Stock Market CRASH / Correction
• How to Protect Your Self From a Stock Market CRASH / Bear Market?
• Chinese Tech Stocks CCP Paranoia
• VIES - Variable Interest Entities
• CCP Paranoid
• Best AI Tech Stocks ETF?
• Best UK Investment Trust
• AI Stocks Buying Pressure Evaluation
• AI Stocks Portfolio Current State
• AI Stocks Portfolio KEY
• What to Buy Today?
• INVEST AND FORGET HIGH RISK STOCKS!
• High Risk Stocks KEY
• Bitcoin Trend Forecast Current State
• Crypto Bear Market Accumulation Current State
• Crazy Crypto Exchanges - How to Buy Bitcoin for $42k, Sell for $59k when trading at $47k!

So for immediate first access to ALL of my analysis and trend forecasts then do consider becoming a Patron by supporting my work for just $3 per month that is soon set to increase to $4 per month for new Patrons, so a short window of opportunity exists to lock in at $3 per month now before the price hike. https://www.patreon.com/Nadeem_Walayat.

My analysis schedule includes:

• UK House Prices Trend Analysis, including an update for the US and a quick look at Canada and China - 15% done
• How to Get Rich! - 90% done - This is a good 6 month work in progress nearing completion.

• US Dollar and British Pound analysis
• Gold Price Trend Analysis - 10%

Again for immediate access to all my work do consider becoming a Patron by supporting my work for just $3 per month that is soon set to increase to $4 per month for new Patrons, so a short window of opportunity exists to lock in at $3 per month. https://www.patreon.com/Nadeem_Walayat.

And ensure you are subscribed to my ALWAYS FREE newsletter for my next in-depth analysis.

Your de-risked along the highs analyst.

Nadeem Walayat

http://www.marketoracle.co.uk

Copyright © 2005-2021 Marketoracle.co.uk (Market Oracle Ltd). All rights reserved.

Nadeem Walayat has over 35 years experience of trading derivatives, portfolio management and analysing the financial markets, including one of few who both anticipated and Beat the 1987 Crash. Nadeem's forward looking analysis focuses on UK inflation, economy, interest rates and housing market. He is the author of five ebook's in the The Inflation Mega-Trend and Stocks Stealth Bull Market series that can be downloaded for Free.

Nadeem is the Editor of The Market Oracle, a FREE Daily Financial Markets Analysis & Forecasting online publication that presents in-depth analysis from over 1000 experienced analysts on a range of views of the probable direction of the financial markets, thus enabling our readers to arrive at an informed opinion on future market direction. http://www.marketoracle.co.uk

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any trading losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors before engaging in any trading activities.

© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.