Chinese Assets Surge as Nasdaq Golden Dragon Index Climbs

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3 days ago
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Chinese assets experienced a significant rally, with the Nasdaq Golden Dragon China Index surging over 3% and the FTSE China 3x Leveraged ETF soaring more than 8%. Popular Chinese stocks saw substantial gains, with Kingsoft Cloud (KC, Financial) rising over 10% and companies like LexinFintech (LX) and iQIYI (IQ) increasing by more than 9%. During the Asian trading session, both A-shares and Hong Kong stocks also saw strong growth.

In the U.S. market, the Dow Jones Industrial Average reached another intraday high, while the S&P 500 and Nasdaq faced slight declines. A key focus was the U.S. October Personal Consumption Expenditures (PCE) Price Index, a preferred inflation measure by the Federal Reserve, which rose 2.8% year-on-year, marking the highest increase since April. This data aligns with market expectations and suggests ongoing inflationary pressures.

In a notable shift, JPMorgan has revised its outlook on the S&P 500 Index, setting a 2025 target of 6,500 points, a 55% increase from its previous forecast of 4,200 points. This change reflects a more optimistic view amid the market's record highs.

Meanwhile, Goldman Sachs analysts suggest diversifying investments due to high concentration and valuation levels in the U.S. stock market. They recommend focusing on Asian stocks, short-term bonds, and the U.S. dollar, with gold as a reliable hedge. Despite high valuations, Goldman Sachs anticipates robust GDP growth and strong performance from major tech stocks to drive an 11% return for the S&P 500 next year.

Overall, global stocks are expected to yield a 9% price return and an 11% total return in the coming year, driven primarily by earnings growth rather than valuation expansion.

Disclosures

I/We may personally own shares in some of the companies mentioned above. However, those positions are not material to either the company or to my/our portfolios.