Chinese stocks stretch comeback into day two, but traders warn it may not last

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Chinese stocks rallied again on Tuesday, stretching a comeback into another day. Two traders weigh in on what's next.

" asked its traders Tuesday: Is this comeback the real deal or just a head fake?

"I don't think we can look at China the way we used to as kind of the world's growth engine. Beijing has engineered an intentional slowdown to end boom-bust cycles that are hard on the consumer. Their focus right now is regulatory crackdown to the benefit of the consumer," said Nancy Tengler, chief investment strategist at Laffer Tengler Investments.such as tutoring in order to make access affordable to everyone in the country.

"Watch the PMIs, they're barely above expansionary levels, orders are weak, backlogs of orders are weak in China, it's exactly the opposite of the U.S.," she said. "The U.S. is going to be driving growth, global growth going forward, and China's going to be on the sidelines trying to rejigger." Michael Bapis, managing director of Vios Advisors at Rockefeller Capital, agrees that the comeback may not last.

"There's too much uncertainty around what the future looks like for that market. The markets are totally dislocated. There's a lot of noise around the forced economic slowdown, there's a lot of noise around the regulatory crackdown, and it just creates volatility and uncertainty for no real reason," Bapis said.

 

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