Consumer & Health Care Stocks Outperform Despite More Trade Drama
5 Min. Read Time
Key News
Asian equities were mostly higher overnight as Korea and Taiwan outperformed while the Philippines and Thailand underperformed, as most local currencies gained against the US dollar.
Hong Kong gained overnight and was one of the top-performing regional markets amid optimism about a trade deal despite Trump’s comments about Xi being “extremely hard” to deal with. The market also shrugged off the increase in steel tariffs by the US overnight.
While the situation appears to be deteriorating, Trump did also heap praise on the Chinese leader, saying he “always liked him”. The president apparently recognizes Xi as a tough negotiator, just as he presents himself to be. Fingers crossed for a deal soon! Though, they can also always extend the truce and exemptions.
After lowering its growth expectations for the US, the OECD also lowered growth expectations for China’s economy on trade issues, but left its GDP growth estimate for 2024 unchanged at 4.7%. Remember exports to the US represent only 2% of China’s GDP, and they definitely will not even be going to zero! Combined with stimulus, the hit to GDP will be very minimal. Nonetheless, I cannot emphasize enough investors should focus on growth and technology and companies focused on domestic demand! We saw this play out overnight as consumer-oriented names outperformed significantly.
Healthcare was a top-performing sector in both Hong Kong and Mainland China. Innovent Biologics gained +14% after the first phase of a trial of its new obesity medication. Meanwhile, nuclear energy company CGN Mining surged +23%, consumer names such as Pop Mart and Miniso were especially strong, and the electric vehicle (EV) ecosystem rebounded as investors finally realized that May sales data were strong.
The Ministry of Industry and Information Technology (MIIT) announced new support for the use of electric vehicles, especially in rural areas in Western China. This is a key a market for growth but is plagued by the lack of charging infrastructure.
South Korea’s decisive election result calmed its markets and represents a return of political stability in the nation after martial law was introduced this past December. South Korea’s markets and currency have been volatile, despite companies like SK Hynix being important players in global AI development.
Last Night's Performance
| Country / Index | Ticker | 1-Day Change |
|---|---|---|
| China (Hong Kong) | HSI Index | 0.6% |
| Hang Seng Tech | HSTECH Index | 0.6% |
| Hong Kong Turnover | HKTurn Index | 4.4% |
| Hong Kong Short Sale Turnover | HKSST Index | 7.6% |
| Short Turnover as a % of Hong Kong Turnover | N/A | 14.6% |
| Southbound Stock Connect Net Buy/Sell (US $ Millions) | N/A | 140.3 |
| China (Shanghai) | SHCOMP Index | 0.4% |
| China (Shenzhen) | SZCOMP Index | 0.9% |
| China (STAR Board) | Star50 Index | 0.4% |
| Mainland Turnover | .chturn Index | 0.9% |
| Northbound Stock Connect Net Buy/Sell (US $ Millions) | N/A | Not Available |
| Jing Daily China Global Luxury Index | CHINALUX Index | 0.9% |
| Japan | NKY Index | 0.8% |
| India | SENSEX Index | 0.3% |
| Indonesia | JCI Index | 0.3% |
| Malaysia | FBMKLCI Index | 0.3% |
| Pakistan | KSE100 Index | 1.1% |
| Philippines | PCOMP Index | -0.5% |
| South Korea | KOSPI Index | 2.7% |
| Taiwan | TWSE Index | 2.3% |
| Thailand | SET Index | -1.5% |
| Singapore | STI Index | 0.2% |
| Australia | AS51 Index | 0.9% |
| Vietnam | VNINDEX Index | -0.1% |
| Indicator | Hong Kong | Mainland China |
|---|---|---|
| Today's Volume % of 1-Year Average | 114 | 92 |
| Advancing Stocks | 55 (Hang Seng) | 200 (CSI 300) |
| Declining Stocks | 24 (Hang Seng) | 91 (CSI 300) |
| Outperforming Factors | Growth | Growth |
| Underperforming Factors | Value | Value |
| Top Sectors | Health Care, Consumer Staples, Energy | Information Technology, Materials, Health Care |
| Bottom Sectors | Industrials, Financials, Utilities | Utilities, Industrials, Consumer Staples |
| Top Subsectors | Consumer Services, Consumer Durables, Household & Personal Products | Leisure Products, Motorcycles, Paper & Packaging |
| Bottom Subsectors | Conglomerates, Real Estate Services, Telecom | Land Transport, Aviation, Construction Machinery |
| Southbound Connect Buys | Tencent, Xiaomi, SMIC | N/A |
| Southbound Connect Sells | Meituan, Alibaba, BYD | N/A |
| MSCI China All Shares Index | # of Stocks | Average 1-Day Change (%) |
|---|---|---|
| Hong Kong Listed | 151 | 0.92 |
| Communication Services | 9 | 1.26 |
| Consumer Discretionary | 28 | 0.82 |
| Consumer Staples | 13 | 1.76 |
| Energy | 7 | 1.29 |
| Financials | 23 | 0.29 |
| Health Care | 13 | 3.94 |
| Industrials | 20 | -0.26 |
| Information Technology | 10 | 0.37 |
| Materials | 10 | 0.99 |
| Real Estate | 6 | 0.59 |
| Utilities | 12 | 0.37 |
| Mainland China Listed | 404 | 0.47 |
| Communication Services | 6 | 0.32 |
| Consumer Discretionary | 31 | 0.38 |
| Consumer Staples | 24 | 0.22 |
| Energy | 13 | 0.29 |
| Financials | 64 | 0.47 |
| Health Care | 31 | 0.57 |
| Industrials | 64 | -0.11 |
| Information Technology | 91 | 1.4 |
| Materials | 58 | 0.78 |
| Real Estate | 6 | 0.46 |
| Utilities | 16 | -0.62 |
| US & Hong Kong Dually Listed | Ticker | 1-Day Change (%) |
|---|---|---|
| Tencent HK | 700 HK Equity | 1.4 |
| Alibaba HK | 9988 HK Equity | 0.6 |
| JD.com HK | 9618 HK Equity | 0.1 |
| NetEase HK | 9999 HK Equity | 1 |
| Yum China HK | 9987 HK Equity | -1.4 |
| Baozun HK | 9991 HK Equity | -3.7 |
| Baidu HK | 9888 HK Equity | 1.2 |
| Autohome HK | 2518 HK Equity | -1.9 |
| Bilibili HK | 9626 HK Equity | -0.6 |
| Trip.com HK | 9961 HK Equity | -3.9 |
| EDU HK | 9901 HK Equity | -0.1 |
| Xpeng HK | 9868 HK Equity | 2.1 |
| Weibo HK | 9898 HK Equity | -0.5 |
| Li Auto HK | 2015 HK Equity | 0 |
| Nio Auto HK | 9866 HK Equity | 1.6 |
| Zhihu HK | 2390 HK Equity | 0.6 |
| KE HK | 2423 HK Equity | 0.8 |
| Tencent Music Entertainment HK | 1698 HK Equity | 1.2 |
| Meituan HK | 3690 HK Equity | 3 |
| Hong Kong's Most Heavily Traded by Value | 1-Day Change (%) |
|---|---|
| XIAOMI CORP-CLASS B | 0.5 |
| TENCENT HOLDINGS LTD | 1.4 |
| MEITUAN-CLASS B | 3 |
| ALIBABA GROUP HOLDING LTD | 0.6 |
| BYD CO LTD-H | 1.4 |
| INNOVENT BIOLOGICS INC | 14.1 |
| POP MART INTERNATIONAL GROUP | 5.1 |
| PING AN INSURANCE GROUP CO-H | -1.4 |
| HONG KONG EXCHANGES & CLEAR | 1.9 |
| CHINA CONSTRUCTION BANK-H | 0.8 |
| Shanghai and Shenzhen's Most Heavily Traded by Value | 1-Day Change (%) |
|---|---|
| ZHONGJI INNOLIGHT CO LTD-A | 6 |
| EOPTOLINK TECHNOLOGY INC L-A | 7.2 |
| BYD CO LTD -A | 1.3 |
| EAST MONEY INFORMATION CO-A | 1.4 |
| SHENZHEN FORMS SYNTRON INF-A | -1.5 |
| FUJIAN SNOWMAN GROUP CO-A | 5.5 |
| WUS PRINTED CIRCUIT KUNSHA-A | 6.8 |
| GUANGZHOU HAIGE COMMUNICAT-A | -2.2 |
| KWEICHOW MOUTAI CO LTD-A | 0.1 |
| GUANGZHOU KINGTELLER TECH -A | 10 |
Last Night's Exchange Rates, Prices, & Yields
- CNY per USD 7.19 versus 7.19 yesterday
- CNY per EUR 8.19 versus 8.18 yesterday
- Yield on 10-Year Government Bond 1.67% versus 1.67% yesterday
- Yield on 10-Year China Development Bank Bond 1.71% versus 1.72% yesterday
- Copper Price 0.53%
- Steel Price 1.57%
