Markets
markets
Luke Kawa

If Chinese stocks rip, US market leaders dip

It’s a brutal day for the US stocks that have been crushing it this year — and a great day for Chinese stocks juiced by hopes for more monetary and fiscal stimulus in 2025.

An ETF that tracks US momentum stocks (i.e., the big winners) is down about 2%, while another that tracks the MSCI China Index is up more than 8%.

The stark difference in fortunes on Monday puts an exclamation point on what’s been a strong postelection trend.

Simply, if US market leaders are doing well relative to the benchmark US stock index, Chinese stocks aren’t. And vice versa. 

Or, in more technical terms, the performance of the iShares MSCI China ETF less the SPDR S&P 500 Trust and the iShares MSCI USA Momentum Factor ETF less the SPDR S&P 500 Trust is the most negatively correlated it’s been since 2016.

We all know the old saw about correlation not being causation. But James van Geelen, founder of Citrini Research, has long been arguing the merits of an allocation to Chinese stocks as a hedge for any potential drawdowns in the high-flying US stocks.

Looks like that thesis is aging well!

The market’s biggest winners are now its big losers

The market’s biggest winners are now its big losers

Or, in more technical terms, the performance of the iShares MSCI China ETF less the SPDR S&P 500 Trust and the iShares MSCI USA Momentum Factor ETF less the SPDR S&P 500 Trust is the most negatively correlated it’s been since 2016.

We all know the old saw about correlation not being causation. But James van Geelen, founder of Citrini Research, has long been arguing the merits of an allocation to Chinese stocks as a hedge for any potential drawdowns in the high-flying US stocks.

Looks like that thesis is aging well!

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SpaceX received more than a dozen positive analyst calls on Tuesday — including from major Wall Street banks — as they initiate coverage on Elon Musk’s space and AI company.

SpaceX went public on June 12 at a $2.2 trillion valuation, the largest debut in history. While the company hasn’t yet posted a profit, it seems to have convinced Wall Street that it will get there and grow its valuation on the way.

Of the at least 17 analysts that gave a rating on Tuesday, all but one gave it a “buy” or “outperform” rating. MoffettNathanson was "neutral."

The ratings come as SpaceX joined the Nasdaq 100 index, a benchmark tech-heavy basket of companies that underpins millions of portfolios. The inclusion adds built-in demand for the stock from index funds and ETFs.

Still, SpaceX fell more than 5% on Tuesday amid a broader sell-off, and is currently effectively flat from its opening price of $150 a share.

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