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So when China comes out with weaker than expected data which it has this week you might say to yourself I don't need to worry about this I don't I'm Chinese stocks.
Doesn't matter your stocks that -- -- may be once you're thinking of owning might have exposure to China.
The world's second largest economy reported its first decline in exports in seventeen months of this Israel and analysts lowered China's second quarter GDP estimate.
Revising forecasts we kill for this but it's still not great for them seven point 5%.
So how concerned should investors be about not even showing up -- stocks they may have in their portfolios that.
Jeff is it to come back to call it a ticking time bomb in a portfolio.
Well I mean I wouldn't go that far mean anyone who's kind of been in China stocks -- the last year -- I've already seen that kind of bomb blow up.
But I do think that some of the multinationals people have and may be odd kind of exposure that they didn't know they had just like a lot of people don't know the kind of stocks and mutual fund.
The same thing goes for individual investments you should know how your companies make their money.
And just because you own a big multinational it's headquartered in in Kentucky somewhere doesn't mean that you're not exposed to China -- people need to know that.
Well that's an excellent point and that's what you're here because if they don't want to do the homework Geoff Reeves of investor paces -- I got a job and let's start -- sectors what sectors might get hit hard by a short term continued move to the downside for China's economic data.
Well as we've already seen him into commodities market -- just been hit.
Really really hard by a slowdown in China that big sucking sound you hear it -- -- demand it's gone away from China's manufacturing anywhere you look whether it's a trade data.
Or -- PMI the purchasing managers index which -- a gauge of manufacturing.
There's just not as much -- coming out of China is not much demand for energy so whether it's cold weather is based battles like copper iron.
But -- just isn't using as much of it anymore and when you add in the fact that we have a strong US dollar and inflation is pretty subdued.
And there's just not really a chance of outside in and other commodity pricing more commodity stocks right now we're looking Peter care for an hour.
Looking at several what three month chart of copper here's a year to date picture and you can see how copper prices have fallen folks this is a simple equation.
China uses a lot of -- is their buildings skyscrapers because it's in.
All kinds of that but wiring and all of that but the fact is that if it starts to fall means there's less demand.
Jeff what is the stock that people need to be worried about in this regard.
Well I -- what that the biggest somebody sucked out and who should pay attention to use BHP Billiton it's a hundred billion dollar market cap company is headquartered in Australia too which is.
Closer to China -- -- got a lot of relationships there.
But I mean like you said copper southern -- another a major player that I owed back pay attention to a -- of all the ones out -- I think BHP is.
It's not as Agile just because of its size it can't really ramp up if things do change but I do think that there it is true across -- -- based models right now.
Yet it's had a good year but not so wonderful when it comes just -- to keep the cameras at my record okay now let's go to what you talked about that as the auto sector picture.
Tell me which name if the Chinese are buying fewer autos has an exposure here that concerns you.
Well I think -- -- -- -- people should really really look at because Florida -- have been behind the China game and there are people there are there other companies that are already there that are making a decent amount of profit.
A Ford actually is kind of -- does have that -- -- of a presence in China right now and.
I think you know Alan Mulally was just on our show saying they were ramping up and I would think this is the time to ramp up when.
The Chinese are more desperate to have this kind of investment so Ford looks Smart don't -- Well I mean I look at it from a consumer perspective in -- last year people believe in this chart a miracle for auto automobiles but.
The actual growth and auto sales -- -- single digits it wasn't that brand and people hold up this metric that 80% of Americans own cars and only 6% of Chinese still.
That's a different culture with a vastly different.
Consumer class -- I think we can't fall into the trap of thinking if you just build it they will -- I mean Ford does have growth potential there but if we do courtesy continued slowdown in China.
I mean are the entrenched players just gonna -- that market share probably.
Yeah it's not the 200 dollar Smartphone everybody said the same thing -- there -- billion people in China the want Smartphones.
And your third pick when it comes to names here is someone that was is a company that was very much in the spotlight yesterday and that is Yum! Brands.
With about more than 50% revenue exposure to China.
Yeah and I mean I think people might get fooled into thinking that it's.
You know the kind of bird flu -- other regulators who are concerned about chicken in China but I would caution people and tell them to look at the fact that McDonald's has also seen.
A lot of softness in -- Asia sales to.
And while Kentucky fried chicken you can blame it on the chicken that's I mean that the bottom line is that it's eight at the Yum! Brands has seen solve this nation's there's sales so as McDonald's -- -- consumer brands over there that I got to believe -- -- China miracle they just throw up -- restaurants are gonna find more people into -- to a degree that may be true but.
Number one you -- Back on a growth is guaranteed a number -- as we learned with so many stocks apple the biggest of them all.
Expectations are sometimes more important -- growth and if a company like Ford.
Is banking everything on -- growth and they don't get it or company like KFC has 50% of its revenue there right I think a little they can go a long way to affect your investments and indeed carefully exposure.
Thank you for educating us Jefferies and and we like the no glasses look.
I don't pass -- -- -- whether it investor place dot com check out the website -- the editors see you next time.
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