The U.S. Federal Reserve is widely expected to finally start taking its foot off the interest rate brakes this week, and that will give authorities at China’s central bank room to act too. By extension, the move in Washington, D.C. could also spell good news for Chinese stocks. “U.S. monetary easing could be a catalyst for a rerating of growth sectors in Chinese markets, with growth outperforming value,” by an average of 44 percentage points, HSBC analysts said late last week, referring to the higher price-to-earnings ratios they think stocks in China may command. “We stress that earnings growth is the key,” analysts led by Steven Sun, head of research at HSBC Qianhai Securities, wrote in the report. “We think growth sectors like semiconductors and consumer electronics, which recorded strong earnings in 1H24, could outperform during the upcoming easing cycle.” High U.S. interest rates relative to China have made it fairly straightforward for global institutions to pick U.S. Treasurys over Chinese stocks. So have Nvidia ‘s stock gains, which have topped 600% since AI mania started less than two years ago. One Chinese city this summer reportedly became the largest investor in a Chinese fund tracking the Nasdaq-100 . More than lower rates needed Other global investors say Chinese stocks need more than easier monetary policy to become truly attractive. “[T]he biggest drivers for global investors’ allocation decision making, when it comes to the China equity market, are the [business] fundamentals” and macroeconomic conditions,” Laura Wang, chief China strategist at Morgan Stanley, said in an early September note. Perhaps worryingly, she noted that Chinese stock valuations have not been positively correlated with U.S. Treasury yields in 2024. The iShares MSCI China ETF (MCHI) has stabilized this year, rising less than 1%, but has posted double-digit declines in each of the past three years. “Chinese equities are attractively priced from a valuation perspective,” Aaron Costello, regional head for Asia at Cambridge Associates , told CNBC earlier this month. They’re “simply missing a catalyst.” The “fundamental catalyst is earnings,” he said, but the wider economy is languishing. “The issue here is the deflation pressure” remains intense. The core consumer price index that strips out food and energy prices only gained 0.3% in August from a year ago. In a rare public comment signaling the sense of urgency, former People’s Bank of China governor Yi Gang said earlier this month that China needs to focus on fighting deflationary pressures . “It’s more than just real estate,” Costello said. “It’s a fundamental crisis of confidence in some ways.” The “government can push interest rates down, but if households don’t want to spend the extra income, it won’t go into the economy,” he said. Hesitant capital spending Businesses have also been cautious about spending. While second-quarter earnings improved from the first quarter, capital expenditures fell by 4% in the first half of the year, the slowest since 2017, with industrials and renewables leading declines, James Wang, head of China strategy at UBS Investment Bank Research, said in a research report on Thursday. Internet, consumer and auto companies reported relatively better results and earnings forecasts, Wang added. UBS expects MSCI China earnings per share to grow by 7% this year. Earlier this year, People’s Bank of China Governor Pan Gongsheng acknowledged U.S. Fed easing would create room for China to further cut interest rates. On the fiscal front, Beijing is also issuing ultra-long bonds , but has remained relatively conservative. “We think China equity markets should benefit from a lower Federal Fund rate and reduced currency pressures, especially if the U.S. economy avoids sliding into recession during the Fed rate cut cycle,” HSBC’s Sun said. “Specifically, our analysis indicates that Wind All-A index and [Hang Seng China Enterprises Index] could generate an average return of 24.9% and 1.5%, respectively, in the 12 months after the Fed’s first rate cut, assuming no U.S. recession,” the HSBC report said. In a search for stocks that could benefit from lower borrowing costs, an HSBC screen found those with a high debt-to-asset ratio included Shenzhen-listed hog producer Muyuan Foods , and Shanghai-listed China Southern Airlines and Hengli Petrochemical , a refinery that’s in talks to see Saudi Arabia’s Aramco take a 10% stake . The HSBC screen looked only at mainland Chinese stocks with expected revenue growth of more than 10% this year and a debt-to-asset ratio above 60%, among other factors.
Leading analyst Craig Moffett suggests any plans to move U.S. iPhone assembly to India is unrealistic.
Moffett, ranked as a top analyst multiple times by Institutional Investor, sent a memo to clients on Friday after the Financial Times reported Apple was aiming to shift production toward India from China by the end of next year.
He’s questioning how a move could bring down costs tied to tariffs because the iPhone components would still be made in China.
“You have a tremendous menu of problems created by tariffs, and moving to India doesn’t solve all the problems. Now granted, it helps to some degree,” the MoffettNathanson partner and senior managing director told CNBC’s “Fast Money” on Friday. “I would question how that’s going to work.”
Moffett contends it’s not so easy to diversify to India — telling clients Apple’s supply chain would still be anchored in China and would likely face resistance.
“The bottom line is a global trade war is a two-front battle, impacting costs and sales. Moving assembly to India might (and we emphasize might) help with the former. The latter may ultimately be the bigger issue,” he wrote to clients.
Moffett cut his Apple price target on Monday to $141 from $184 a share. It implies a 33% drop from Friday’s close. The price target is also the Street low, according to FactSet.
“I don’t think of myself as the biggest Apple bear,” he said. “I think quite highly of Apple. My concern about Apple has been the valuation more than the company.”
Moffett has had a “sell” rating on Apple since Jan. 7. Since then, the company’s shares are down about 14%.
“None of this is because Apple is a bad company. They still have a great balance sheet [and] a great consumer franchise,” he said. “It’s just the reality of there are no good answers when you are a product company, and your products are going to be significantly tariffed, and you’re heading into a market that is likely to have at least some deceleration in consumer demand because of the macro economy.”
Moffett notes Apple also isn’t getting help from its carriers to cushion the blow of tariffs.
“You also have the demand destruction that’s created by potentially higher prices. Remember, you had AT&T, Verizon and T. Mobile all this week come out and say we’re not going to underwrite the additional cost of tariff [on] handsets,” he added. “The consumer is going to have to pay for that. So, you’re going to have some demand destruction that’s going to show up in even longer holding periods and slower upgrade rates — all of which probably trims estimates next year’s consensus.”
According to Moffett, the backlash against Apple in China over U.S. tariffs will also hurt iPhone sales.
“It’s a very real problem,” Moffett said. “Volumes are really going to the Huaweis and the Vivos and the local competitors in China rather than to Apple.”
Apple stock is coming off a winning week — up more than 6%. It comes ahead of the iPhone maker’s quarterly earnings report due next Thursday after the market close.
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In a year that hasn’t been kind to many big-name stocks, Warren Buffett’s Berkshire Hathaway is standing near the top. Berkshire shares have posted a 17% return year-to-date, while the S&P 500 index is down 6%.
That performance places Berkshire among the top 10% of the U.S. market’s large-cap leaders, and the run has been getting Buffett more attention ahead of next weekend’s annual Berkshire Hathaway shareholder meeting in Omaha, Nebraska. It’s also good timing for the recently launched VistaShares Target 15 Berkshire Select Income ETF(OMAH), which holds the top 20 most heavily weighted stocks in Berkshire Hathaway, as well as shares of Berkshire Hathaway.
“It’s a really well-balanced portfolio chosen by the most successful investor the world has ever seen,” Adam Patti, CEO of VistaShares, said in an appearance this week on CNBC’s “ETF Edge.”
Berkshire’s outperformance of the S&P 500 isn’t limited to 2025. Buffett’s stock has tripled the performance of the market over the past year, and its 185% return over the past five years is more than double the performance of the S&P 500.
Berkshire Hathaway is one of 2025’s top performing stocks.
In addition to this long-term track record of success in the market, Berkshire Hathaway is getting a lot of attention right now for the record amount of cash Buffett is holding as he trimmed stakes in big stocks including Apple, which has proven to be a great strategy. The S&P 500 has experienced extreme short-term volatility since President Donald Trump’s inauguration on January 20. Even after a recent recovery, the S&P is still down 8% since the start of Trump’s second term.
“The market has been momentum driven for many years, the switch has flipped and we’re looking at quality in terms of exposure, and Berkshire Hathaway has performed incredibly well this year, handily outperforming the S&P 500,” said Patti.
Berkshire Hathaway famously doesn’t pay a dividend, with Buffett holding firm over many decades in the belief that he can re-invest cash to create more value for shareholders. In a letter to shareholders in February, Buffett wrote that Berkshire shareholders “can rest assured that we will forever deploy a substantial majority of their money in equities — mostly American equities.”
The lack of a dividend payment has been an issue over the years for some shareholders at Berkshire who do want income from the market, according to Patti, who added that his firm conducted research among investors in designing the ETF. “Who doesn’t want to invest like Buffett, but with income?” he said.
So, in addition to being tied to the performance of Berkshire and the stock picks of Buffett, the VistaShares Target 15 Berkshire Select Income ETF is designed to produce income of 15% annually through a strategy of selling call options and distributing monthly payments of 1.25% to shareholders. This income strategy has become more popular in the ETF space, with more asset managers launching funds to capture income opportunities and more investors adopting the approach amid market volatility.
People shop for produce at a Walmart in Rosemead, California, on April 11, 2025.
Frederic J. Brown | Afp | Getty Images
A growing number of Americans are using buy now, pay later loans to buy groceries, and more people are paying those bills late, according to new Lending Tree data released Friday.
The figures are the latest indicator that some consumers are cracking under the pressure of an uncertain economy and are having trouble affording essentials such as groceries as they contend with persistent inflation, high interest rates and concerns around tariffs.
In a survey conducted April 2-3 of 2,000 U.S. consumers ages 18 to 79, around half reported having used buy now, pay later services. Of those consumers, 25% of respondents said they were using BNPL loans to buy groceries, up from 14% in 2024 and 21% in 2023, the firm said.
Meanwhile, 41% of respondents said they made a late payment on a BNPL loan in the past year, up from 34% in the year prior, the survey found.
Lending Tree’s chief consumer finance analyst, Matt Schulz, said that of those respondents who said they paid a BNPL bill late, most said it was by no more than a week or so.
“A lot of people are struggling and looking for ways to extend their budget,” Schulz said. “Inflation is still a problem. Interest rates are still really high. There’s a lot of uncertainty around tariffs and other economic issues, and it’s all going to add up to a lot of people looking for ways to extend their budget however they can.”
“For an awful lot of people, that’s going to mean leaning on buy now, pay later loans, for better or for worse,” he said.
He stopped short of calling the results a recession indicator but said conditions are expected to decline further before they get better.
“I do think it’s going to get worse, at least in the short term,” said Schulz. “I don’t know that there’s a whole lot of reason to expect these numbers to get better in the near term.”
The loans, which allow consumers to split up purchases into several smaller payments, are a popular alternative to credit cards because they often don’t charge interest. But consumers can see high fees if they pay late, and they can run into problems if they stack up multiple loans. In Lending Tree’s survey, 60% of BNPL users said they’ve had multiple loans at once, with nearly a fourth saying they have held three or more at once.
“It’s just really important for people to be cautious when they use these things, because even though they can be a really good interest-free tool to help you kind of make it from one paycheck to the next, there’s also a lot of risk in mismanaging it,” said Schulz. “So people should tread lightly.”
Lending Tree’s findings come after Billboard revealed that about 60% of general admission Coachella attendees funded their concert tickets with buy now, pay later loans, sparking a debate on the state of the economy and how consumers are using debt to keep up their lifestyles. A recent announcement from DoorDash that it would begin accepting BNPL financing from Klarna for food deliveries led to widespread mockery and jokes that Americans were struggling so much that they were now being forced to finance cheeseburgers and burritos.
Over the last few years, consumers have held up relatively well, even in the face of persistent inflation and high interest rates, because the job market was strong and wage growth had kept up with inflation — at least for some workers.
Earlier this year, however, large companies including Walmart and Delta Airlines began warning that the dynamic had begun to shift and they were seeing cracks in demand, which was leading to worse-than-expected sales forecasts.