{"id":8959,"date":"2023-11-03T06:14:08","date_gmt":"2023-11-03T06:14:08","guid":{"rendered":"https:\/\/infundpros.com\/markets\/chinas-consumer-isnt-all-right-yet-heres-what-that-means-for-consumer-stocks\/"},"modified":"2023-11-03T06:14:09","modified_gmt":"2023-11-03T06:14:09","slug":"chinas-consumer-isnt-all-right-yet-heres-what-that-means-for-consumer-stocks","status":"publish","type":"post","link":"https:\/\/infundpros.com\/?p=8959","title":{"rendered":"China’s Consumer Isn’t All Right Yet. Here’s What That Means For Consumer Stocks."},"content":{"rendered":"
\n
<\/p>\n

<\/p>\n

<\/p>\n<\/figure><\/div>\n

China\u2019s economic recovery largely rests on whether the country\u2019s consumers have recovered from the scars created by strict Covid restrictions, increased intervention in the private sector and a property slump. Recent quarterly results from global consumer giants doesn\u2019t instill much confidence that the economy is turning a corner.<\/p>\n

\n Est\u00e9e Lauder
\n (EL), home to brands like Clinique and M.A.C, cited weak demand in China as it warned fiscal 2024 adjusted per-share earnings could fall as much as 33% versus earlier projections for a rise. It now sees sales falling as much as 2%, compared with its prior expectations revenue would grow 5% to 7%. Tesla\u2019s (TSLA) China-made electric vehicle sales fell 11% from the year-earlier in September.<\/p>\n

\n

And
\n Yum China
\n (YUMC) added to concerns about China\u2019s recovery this week, missing third-quarter earnings and revenue expectations, and warning of softening demand among fast-food customers in late September and October. Chief Financial Officer Andy Yeung in a call with analysts described the postpandemic recovery as \u201cwavelike\u201d and \u201cnonlinear.\u201d<\/p>\n

\u201cI was calling China\u2019s recovery a crab walk, but I think that is probably even optimistic,\u201d says Laura Geritz, head of Rondure Global Advisors, noting the remarks. \u201cThe fear is that this isn\u2019t a wave, but a sign of something more sinister.\u201d<\/p>\n

While recent economic data has shown pockets of stabilizing, signs of an actual recovery are still fleeting, even as Beijing rolls out more stimulus.<\/p>\n

Geritz and other fund managers see consumers in China becoming more value-oriented against a sluggish economic backdrop where youth unemployment is in the double digits and the property market is still flailing.<\/p>\n

\u201cWe are hearing from a number of companies that Chinese consumers are trading down, favoring more value for money brands in categories such as sportswear, and food and beverage,\u201d said Ginny Chong, senior portfolio manager at Mondrian Investment Partners.<\/p>\n

Indeed, as China\u2019s version of Black Friday approaches on Nov. 11 with Singles Day, Citi China Internet analyst Alicia Yap notes a preponderance of \u201cever cheapest\u201d offers to woo consumers. In a note to clients, Yap said she expects another muted Singles Day performance.<\/p>\n

Brand preferences are becoming more entrenched, especially as disposable income becomes tighter, and consumers are often trading down into Chinese brands that have been gaining share, fund managers say.<\/p>\n

In Est\u00e9e Lauder\u2019s world of cosmetics, local Chinese brand Proya has been performing well while Huawei has been a stronger challenger to
\n Apple,<\/span>
\n Chong adds. Indeed, analysts are closely monitoring just how much Huawei\u2019s new phone cuts into demand for iPhones.<\/p>\n

What worries investors is that both consumers and companies seem beaten up. Visits by Geritz\u2019s team to companies in China found executives that were \u201cmeek and bleak\u201d across sectors, a stark change from pre-COVID visits.<\/p>\n

Howie Schwab, manager of the $2.3 billion Driehaus Emerging Markets Growth fund (DREGX), says Beijing\u2019s raft of stimulus measures have not done much to help turnaround confidence <\/p>\n

\u201cThese are stopgap measures,\u201d says Schwab, who has under 20% of his fund in China, compared with the 26% average held by peers. \u201d Chinese policy makers are trying to address structural issues with conventional cyclical tactics and the market and these [earnings] reports are saying it\u2019s ineffectual.\u201d<\/p>\n

Also making Schwab wary: the state\u2019s increasing role in the private sector with Chinese executives having to be educated on Chinese Communist Party ideology at regular strategy meetings. Xi Jinping\u2019s focus on common prosperity and tackling inequities may also not bode well for luxury spending, cosmetics and experiential restaurants\u2014another potential blow to some consumer-oriented companies, Schwab says.<\/p>\n

Schwab doesn\u2019t rule out the possibility of a sharp bounce in battered Chinese stocks if Beijing changes its tune on stimulus or a U.S. recession pushes investors to seek markets where policy makers are already trying to engineer a recovery. But he sees any bounce as a fleeting, short-term trade as was the case last year when China eased Covid restrictions.<\/p>\n

Indeed, at $42.11, the iShares MSCI China exchange-traded fund (ETF) is trading back near the levels of last year before the rally\u2014a note of caution for investors looking for a bounce in Chinese stocks.<\/p>\n

Write to Reshma Kapadia at reshma.kapadia@barrons.com<\/p>\n<\/p><\/div>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

China\u2019s economic recovery largely rests on whether the country\u2019s consumers have recovered from the scars created by strict Covid restrictions, increased intervention…<\/p>\n","protected":false},"author":1,"featured_media":8960,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[25],"tags":[],"class_list":{"0":"post-8959","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-markets"},"yoast_head":"\nChina's Consumer Isn't All Right Yet. Here's What That Means For Consumer Stocks. | inFundPros<\/title>\n<meta name=\"description\" content=\"China\u2019s economic recovery largely rests on whether the country\u2019s consumers have recovered from the scars created by strict Covid restrictions, increased\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/infundpros.com\/?p=8959\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"China's Consumer Isn't All Right Yet. Here's What That Means For Consumer Stocks. | inFundPros\" \/>\n<meta property=\"og:description\" content=\"China\u2019s economic recovery largely rests on whether the country\u2019s consumers have recovered from the scars created by strict Covid restrictions, increased\" \/>\n<meta property=\"og:url\" content=\"https:\/\/infundpros.com\/?p=8959\" \/>\n<meta property=\"og:site_name\" content=\"inFundPros\" \/>\n<meta property=\"article:published_time\" content=\"2023-11-03T06:14:08+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2023-11-03T06:14:09+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/infundpros.com\/wp-content\/uploads\/2023\/11\/1698992048_social.jpeg\" \/>\n\t<meta property=\"og:image:width\" content=\"1280\" \/>\n\t<meta property=\"og:image:height\" content=\"640\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Press Room\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Press Room\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"4 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/infundpros.com\/?p=8959#article\",\"isPartOf\":{\"@id\":\"https:\/\/infundpros.com\/?p=8959\"},\"author\":{\"name\":\"Press Room\",\"@id\":\"https:\/\/infundpros.com\/#\/schema\/person\/87f7e632b195ea95c91503d9281f5eff\"},\"headline\":\"China’s Consumer Isn’t All Right Yet. Here’s What That Means For Consumer Stocks.\",\"datePublished\":\"2023-11-03T06:14:08+00:00\",\"dateModified\":\"2023-11-03T06:14:09+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/infundpros.com\/?p=8959\"},\"wordCount\":719,\"commentCount\":0,\"publisher\":{\"@id\":\"https:\/\/infundpros.com\/#organization\"},\"articleSection\":[\"Markets\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\/\/infundpros.com\/?p=8959#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/infundpros.com\/?p=8959\",\"url\":\"https:\/\/infundpros.com\/?p=8959\",\"name\":\"China's Consumer Isn't All Right Yet. Here's What That Means For Consumer Stocks. | inFundPros\",\"isPartOf\":{\"@id\":\"https:\/\/infundpros.com\/#website\"},\"datePublished\":\"2023-11-03T06:14:08+00:00\",\"dateModified\":\"2023-11-03T06:14:09+00:00\",\"description\":\"China\u2019s economic recovery largely rests on whether the country\u2019s consumers have recovered from the scars created by strict Covid restrictions, increased\",\"breadcrumb\":{\"@id\":\"https:\/\/infundpros.com\/?p=8959#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/infundpros.com\/?p=8959\"]}]},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/infundpros.com\/?p=8959#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/infundpros.com\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"China’s Consumer Isn’t All Right Yet. Here’s What That Means For Consumer Stocks.\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/infundpros.com\/#website\",\"url\":\"https:\/\/infundpros.com\/\",\"name\":\"Fintech Advance\",\"description\":\"Latest Finance and Tech News and Updates\",\"publisher\":{\"@id\":\"https:\/\/infundpros.com\/#organization\"},\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/infundpros.com\/?s={search_term_string}\"},\"query-input\":\"required name=search_term_string\"}],\"inLanguage\":\"en-US\"},{\"@type\":\"Organization\",\"@id\":\"https:\/\/infundpros.com\/#organization\",\"name\":\"Fintech Advance\",\"url\":\"https:\/\/infundpros.com\/\",\"logo\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/infundpros.com\/#\/schema\/logo\/image\/\",\"url\":\"https:\/\/infundpros.com\/wp-content\/uploads\/2023\/10\/tech-logo.png\",\"contentUrl\":\"https:\/\/infundpros.com\/wp-content\/uploads\/2023\/10\/tech-logo.png\",\"width\":409,\"height\":70,\"caption\":\"Fintech Advance\"},\"image\":{\"@id\":\"https:\/\/infundpros.com\/#\/schema\/logo\/image\/\"}},{\"@type\":\"Person\",\"@id\":\"https:\/\/infundpros.com\/#\/schema\/person\/87f7e632b195ea95c91503d9281f5eff\",\"name\":\"Press Room\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/infundpros.com\/#\/schema\/person\/image\/\",\"url\":\"https:\/\/infundpros.com\/wp-content\/uploads\/2023\/10\/avatar_user_1_1697230663-96x96.png\",\"contentUrl\":\"https:\/\/infundpros.com\/wp-content\/uploads\/2023\/10\/avatar_user_1_1697230663-96x96.png\",\"caption\":\"Press Room\"},\"sameAs\":[\"https:\/\/infundpros.com\"],\"url\":\"https:\/\/infundpros.com\/?author=1\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"China's Consumer Isn't All Right Yet. Here's What That Means For Consumer Stocks. | inFundPros","description":"China\u2019s economic recovery largely rests on whether the country\u2019s consumers have recovered from the scars created by strict Covid restrictions, increased","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/infundpros.com\/?p=8959","og_locale":"en_US","og_type":"article","og_title":"China's Consumer Isn't All Right Yet. Here's What That Means For Consumer Stocks. | inFundPros","og_description":"China\u2019s economic recovery largely rests on whether the country\u2019s consumers have recovered from the scars created by strict Covid restrictions, increased","og_url":"https:\/\/infundpros.com\/?p=8959","og_site_name":"inFundPros","article_published_time":"2023-11-03T06:14:08+00:00","article_modified_time":"2023-11-03T06:14:09+00:00","og_image":[{"width":1280,"height":640,"url":"https:\/\/infundpros.com\/wp-content\/uploads\/2023\/11\/1698992048_social.jpeg","type":"image\/jpeg"}],"author":"Press Room","twitter_card":"summary_large_image","twitter_misc":{"Written by":"Press Room","Est. reading time":"4 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"Article","@id":"https:\/\/infundpros.com\/?p=8959#article","isPartOf":{"@id":"https:\/\/infundpros.com\/?p=8959"},"author":{"name":"Press Room","@id":"https:\/\/infundpros.com\/#\/schema\/person\/87f7e632b195ea95c91503d9281f5eff"},"headline":"China’s Consumer Isn’t All Right Yet. Here’s What That Means For Consumer Stocks.","datePublished":"2023-11-03T06:14:08+00:00","dateModified":"2023-11-03T06:14:09+00:00","mainEntityOfPage":{"@id":"https:\/\/infundpros.com\/?p=8959"},"wordCount":719,"commentCount":0,"publisher":{"@id":"https:\/\/infundpros.com\/#organization"},"articleSection":["Markets"],"inLanguage":"en-US","potentialAction":[{"@type":"CommentAction","name":"Comment","target":["https:\/\/infundpros.com\/?p=8959#respond"]}]},{"@type":"WebPage","@id":"https:\/\/infundpros.com\/?p=8959","url":"https:\/\/infundpros.com\/?p=8959","name":"China's Consumer Isn't All Right Yet. Here's What That Means For Consumer Stocks. | inFundPros","isPartOf":{"@id":"https:\/\/infundpros.com\/#website"},"datePublished":"2023-11-03T06:14:08+00:00","dateModified":"2023-11-03T06:14:09+00:00","description":"China\u2019s economic recovery largely rests on whether the country\u2019s consumers have recovered from the scars created by strict Covid restrictions, increased","breadcrumb":{"@id":"https:\/\/infundpros.com\/?p=8959#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/infundpros.com\/?p=8959"]}]},{"@type":"BreadcrumbList","@id":"https:\/\/infundpros.com\/?p=8959#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/infundpros.com\/"},{"@type":"ListItem","position":2,"name":"China’s Consumer Isn’t All Right Yet. Here’s What That Means For Consumer Stocks."}]},{"@type":"WebSite","@id":"https:\/\/infundpros.com\/#website","url":"https:\/\/infundpros.com\/","name":"Fintech Advance","description":"Latest Finance and Tech News and Updates","publisher":{"@id":"https:\/\/infundpros.com\/#organization"},"potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/infundpros.com\/?s={search_term_string}"},"query-input":"required name=search_term_string"}],"inLanguage":"en-US"},{"@type":"Organization","@id":"https:\/\/infundpros.com\/#organization","name":"Fintech Advance","url":"https:\/\/infundpros.com\/","logo":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/infundpros.com\/#\/schema\/logo\/image\/","url":"https:\/\/infundpros.com\/wp-content\/uploads\/2023\/10\/tech-logo.png","contentUrl":"https:\/\/infundpros.com\/wp-content\/uploads\/2023\/10\/tech-logo.png","width":409,"height":70,"caption":"Fintech Advance"},"image":{"@id":"https:\/\/infundpros.com\/#\/schema\/logo\/image\/"}},{"@type":"Person","@id":"https:\/\/infundpros.com\/#\/schema\/person\/87f7e632b195ea95c91503d9281f5eff","name":"Press Room","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/infundpros.com\/#\/schema\/person\/image\/","url":"https:\/\/infundpros.com\/wp-content\/uploads\/2023\/10\/avatar_user_1_1697230663-96x96.png","contentUrl":"https:\/\/infundpros.com\/wp-content\/uploads\/2023\/10\/avatar_user_1_1697230663-96x96.png","caption":"Press Room"},"sameAs":["https:\/\/infundpros.com"],"url":"https:\/\/infundpros.com\/?author=1"}]}},"amp_enabled":true,"_links":{"self":[{"href":"https:\/\/infundpros.com\/index.php?rest_route=\/wp\/v2\/posts\/8959","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/infundpros.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/infundpros.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/infundpros.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/infundpros.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=8959"}],"version-history":[{"count":1,"href":"https:\/\/infundpros.com\/index.php?rest_route=\/wp\/v2\/posts\/8959\/revisions"}],"predecessor-version":[{"id":8961,"href":"https:\/\/infundpros.com\/index.php?rest_route=\/wp\/v2\/posts\/8959\/revisions\/8961"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/infundpros.com\/index.php?rest_route=\/wp\/v2\/media\/8960"}],"wp:attachment":[{"href":"https:\/\/infundpros.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=8959"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/infundpros.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=8959"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/infundpros.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=8959"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}