Investors slam the brakes on the hottest trade going in the market

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Investment Strategy News

Stock Markets,China,Ishares China Large-Cap ETF

Exchange traded funds and stocks tied to China took a big hit in Tuesday's session.

The China trade started showing signs of fading on Tuesday after the country's economic planning body stopped short of announcing any new major stimulus plans. Zheng Shanjie, chairman of China's National Development and Reform Commission, shared several actions on Tuesday aimed at bolstering the world's second-largest economy. But he did not announce any major new plans for ensuring economic health, leaving investors feeling underwhelmed.

Appaloosa Management founder David Tepper, meanwhile, said his investment plan after the U.S. Federal Reserve began cutting rates last months was to buy "everything" connected to China. Beyond funds, he cited casino stocks Wynn Resorts and Las Vegas Sands — with large operations in Macau — as individual stocks that are leveraged to China. Both retreated in Tuesday's session. Now, market participants are wondering what's next for China's markets and the U.S.

 

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