Michael Gayed, “The Lead-Lag Report”, believes this could change by 2025.
Market veteran expects Chinese stocks to perform better than their US counterparts in the coming four years.
In a CNBC Interview on Monday, he said that if you were going to make a spread, trading long China for short US dollar-for-dollar could be an interesting option.
Gayed’s comments come at a moment when S&P 500 is losing money on fears of a trade war following President Trump’s announcements about tariffs. Meanwhile, Chinese stocks are continuing to enjoy a DeepSeek-infused rally.
Does the Trump Administration have a negative impact on US Stocks?
Michael Gayed’s four-year outlook essentially indicates that US stocks underperform China during the Trump Administration.
The expected decline in US power is not really related to who holds the reins.
It’s entirely based on the attractive valuations which could lead global capital into Chinese stocks by 2025.
The valuations between Beijing and the US are very different. I would argue that there is a huge underinvestment in China.
This discrepancy will lead to an increase in allocations to Chinese stocks, said he this morning during “SquawkBox Asia”.
Why is Gayed a contrarian on Chinese stocks
Gayed anticipates that local investors will return to Chinese shares as we move further away from bitter memories of COVID.
Recent concerns about political and regulatory uncertainty have given rise to the narrative that Beijing was not really an investment or too speculative.
Gayed is not blind to these concerns, but he still holds on to the contrarian belief that “everything can be invested when trends are up.”
The portfolio manager believes that in the end, greed will overpower concerns about Chinese stocks. He also expects valuations “to matter more than political ideologies.”
Chinese stocks to watch in 2025
A whole host of factors suggest that Chinese stocks could outperform the US by 2025.
In an effort to improve investor confidence, the government of this country has implemented fiscal stimuli and reviewed its technology industry.
Beijing could also do well in the United States in the coming four years if it commits to AI, which many people believe to be worth $1 trillion over the course of the next decade.
These stocks are expected to continue their rise as the year progresses.
The post, Why Chinese stocks may outperform US markets under Trump’s Tariffs, will be updated as new information becomes available.
