Jake’s Take: China’s Stock Market Soars as Stimulus Fuels Optimism

Last week was the best week for China’s stock market since 2008—and that rally was followed by an 8.5% jump in the CSI Monday, the single best day for Chinese stocks since 2008.

The announcement of aggressive stimulus measures last week is a game-changer that should give a boost to consumer sentiment. BABA, PDD, and JD are all trading higher since the news broke—as are LVMH and Kering.

As I’ve been writing about for the last two years, despite sluggish sentiment, there’s still been strong pockets of consumption growth in China (and overall consumption has continued to grow, albeit at lower rates than pre-pandemic). Tourism, health and fitness-related goods and services, pet, beauty, skincare, fashion, etc. have all been growing steadily—and creating growth opportunities for our brand partners across multiple segments. It’s primarily luxury, overseas automakers, and large durables that have taken a hit—and those sectors have outsized influence on the narrative.

That said, it’s encouraging to hear of an aggressive fiscal package targeting consumption. While the details haven’t been released, that should boost sentiment and increase consumption growth.

Really encouraged by this news as we head into the Golden Week—and with Singles’ Day around the corner. These holidays serve as barometers for sentiment and I’m expecting positive numbers out of both.