Buying the Strong: China CN50 Outperforming & Breaking out 1) Last week we saw China mainland/HK equity outperforming other major equity bourses, with the CN50 +4% w/w
2) Technically, we've seen the CN50 index breaking out to new cycle highs... the daily chart is a thing of beauty... much of this can be attributed to a 22% weekly gain for Cambricon Tech, a favoured AI play in China and the 7th biggest weighting (3.2%) on the CN50 index...
3) Headlines coming out now suggest some sort of trade deal with the US has been reached... whilst this wont necessarily surprise, it should still be taken well by both China and US equity markets... that said, the contra view is if China are to loosen its rare earth controls it could make the Chinese AI plays relatively less attractive in the short-term...
4) Last week's China 4th Plenum detailed that policymakers will continue going hard on making China the dominant AI centre globally, and enhancing technological self reliance over the coming 5 years.
The US vs China battle to be the dominant AI player by 2030 ramps up - and remains one of the most interesting and important developments in global markets and macro....
