© Stocksak. China Sell-Off is Disconnected from Fundamentals, Presents an Opportunity According to JPM’s Kolanovic
By Sam Boughedda
JPMorgan analyst Marko Kolanovic stated Monday in a note to clients that the China selloff is “disconnected with fundamentals” and presents a chance.
The session was dominated by fears about China’s power shuffle and U.S.-listed Chinese stock prices fell
Kolanovic, in his research note on global market markets, wrote that China’s growth data was positive over the weekend but that their equity market is selling strongly today. “We believe this is an excellent opportunity to add given an expected recovery in growth, gradual COVID openness, and monetary stimulus.”
The analyst stated that earnings for the third and fourth quarters should confirm that fundamentals remain anchored to resilient labor markets and the COVID opening, but that the firm has lowered its 2023 EPS estimates by a flat y/y.
“Bonds were mixed last Wednesday, following sharp rises of yields in recent week. The curve in the U.S. grew significantly after news reports that Fed officials were worried about tightening too much. We remain neutral on duration and curve and hold longs 5Y breakevens hedged by shorts futures.