Global markets worsen. U.S market rally dies. China bucks the trend. Some China stock picks revealed. Weekly observation 03Dec2021

CN(risk-on) SG(risk-off) HK(risk-off)

Global markets worsen. U.S market rally dies. China bucks the trend. Some China stock picks revealed. Weekly observation 03Dec2021
Photo by Bruce Röttgers / Unsplash

Last week was bad for global stock markets. This week (29Nov2021 -  3Dec2021) was worse.

The U.S market rally looks dead. S&P500 and Nasdaq100 fell below 50-day moving average in high volume. Small-cap index Russell2000 fell below 200-day moving average.

U.S market is a leader for global stock markets. When U.S stock market falls, it is hard for other smaller stock markets not to follow, let alone go against the tide set by the leader. One exception is China's stock market, which is a leader in its own right.

European markets and Asian markets fared worse with China being the exception once again, like last week.

Global stock indices on 03Dec2021 sorted in descending order with respect to the 50-day moving average (*percentage over exponential moving averages)

The table above shows where the stock indices fare with respect to the moving averages, sorted in descending order with respect to the 50-day moving average.

The top 3 performing stock indices this week are all China stock indices and they are the only ones in the table above that remain above 50-day moving average. These indices rose this week while the rest languished.

Hang Seng Index remains the worst performer, like last week.

Broad market statistics 26Nov21 - 03Dec21

The number of stocks above key moving averages in China's broader market showed a marked improvement this week despite the global stock carnage. Another sign of strength is the gains made by some stocks in my China stock portfolio this week.

Here are the weekly gains made by the stocks I revealed last week;

Promising stocks in portfolio

Here are some of the promising stocks which performed well this week in my portfolio.
002556.SZ (Anhui Huilong Agriculture)
603713.SS (Milkyway Chemical)
600879.SS (China Aerospace Electronics)
603236.SS (Quectel Wireless)
600072.SS (CSSC Science & Technology)
000568.SZ (Luzhou Laojiao)
600745.SS (Wingtech Technology)
600764.SS (China Marine Information Electronics)
600378.SS (Haohua Chemical)
001872.SZ (China Merchants Port Group)
002389.SZ (Aerospace CH)
002859.SZ (Zhejiang Jiemei Electronic)

These stocks are the current leaders in my portfolio. Tracking them and putting it into writing gives me a closer feel for the market as a market observer. I am not revealing them to promote myself as a guru and then sell an expensive financial trading course. Please do not follow my portfolio stocks blindly. I am not a licensed financial adviser and not qualified to give financial advice. Some of the stocks are extended in price and chasing them at high prices can lead to financial damage. I already have some profit cushion as protection. With global markets in shaky grounds this week plus the crash in cryptocurrencies yesterday (04Dec2021), it does look risky to plough into Chinese stocks next week. What I do for myself may not be suitable for the risk appetite of general public.

One attraction of China's stocks at this point in time is the strong Renminbi year to date. USD is a very strong currency this year. If I may say so, USD is so strong that it almost made currencies of Japan, Europe, Australia look like emerging countries'. Year to date (3Dec2021), USD has appreciated against Euro by 8.07%, appreciated against Japanese Yen by 9.31%, appreciated against Australian dollar by 9.92%. Against this backdrop, offshore Renminbi (CNH) actually managed to beat USD by 1.92% (onshore Renminbi is even stronger).

USD appreciated against major currencies by huge margin year to date except for CNH

This was a bad week for Singapore stock market. Straits Times Index dropped 2.03% on high volume for the week. I have been aggressively selling down stocks in the Singapore portfolio and sold off most of the stocks in the portfolio by end of the week as they reached designated price levels to manage my risk exposure.

Hong Kong stock market has been in the doldrums since Sep. I have zero exposure to HK stocks at this moment. However, HK stock market valuation is attractive. Hang Seng Index(HSI) traded below book value this week. It is not only HSI which is cheap. The broad market is cheap too. You can see how battered individual HK stocks are from the percentage of stocks below key moving averages. When the stock market rally returns to the HK market eventually, it is likely to be a strong bull market. However, it is still not yet time to start buying HK stocks as I can't smell any rally at the moment. If you are a long-term value investor who does not care about market timing, now would be a good time to start looking in HK market.

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