Asia Takes Temporary Hit From Trump Win. But …
There’s nothing to worry about when it comes to China or Southeast Asia …
First, when push comes to shove, China will not tolerate Trump’s plan to slap trade tariffs on its exports. Nor will any other Asian country. So that fear, which drove Asian stocks lower, is overblown.
Moreover, President-elect Trump will be forced to back down early in his administration once he realizes what’s at stake: Financing the U.S. government as exporters start dumping our bonds, which I cover in this month’s main article.
Without foreign governments, namely China, Japan and Europe — financing our debt, we’re toast.
Second, domestic demand in Asia is on the rise, and their economies are less dependent upon exports than they have ever been.
Third, most of the region’s stock markets, including China, are still vastly misunderstood. As their currencies decline against the dollar, their current exports become even cheaper. Moreover, nearly of all Asia’s governments are in good financial shape, with budget surpluses and stable leadership.
Bottom line: Asia is still the rising star of the global economy and China is still set to become the largest most influential economy in the world.
Therefore, I recommend …
n Holding your shares in iShares China Large-Cap ETF, symbol FXI, with an approximate open gain of 4.6 percent. Maintain a good-till-canceled sell-stop at $27.44.
If not on board FXI, buy it now at the market using 5 percent of the funds you have allocated to the Asia Investments section. Place a good-till-canceled protective sell-stop at $27.44.
n Holding your shares in U.S. Global Investors — China Region Fund, symbol USCOX. Exit the fund if it closes below $6.20 on any trading day. This position is up 8.9 percent.
If you have not purchased this fund, you may purchase it now at the market using 5 percent of the funds you have allocated to the Asia Investments section. Exit the fund if it closes below $6.20 on any trading day.
n Holding your shares in China National Offshore Oil Corp., symbol CEO, and maintaining your good-till-canceled protective sell-stop to $108.29.
If you have not purchased CEO, you may purchase it now at the market using 5 percent of the funds you have allocated to the Asia Investments section. Place a good-till-canceled protective sell-stop at $108.29.
You should have been stopped out of Veolia Environnement SA (VEOEY) on November 14 when it hit my recommended good-till-canceled stop at $17.37. If you’re not out, for whatever reason, exit now at the market and make sure you have canceled any outstanding sell-stops for VEOEY.
