Why China stocks are now a buy for U.S. investors

By Philip van Doorn

Also: Unusual action for the S&P 500, a hot bond market and interviews with acting HUD secretary and AT&T's chief operating officer

On Tuesday, People's Bank of China Gov. Pan Gongsheng announced a slew of stimulus measures that one economist called that central bank's most significant stimulus move since the Covid-19 pandemic. Then on Thursday, the Hang Seng Index HK:HSI hit a one-year high after China's Politburo said additional measures were on the table to support economic growth, according to a state media report.

Through Friday, the Hang Seng Index was up 13% from a week earlier.

In this week's ETF Wrap, Isabel Wang covered the renewed enthusiasm for exchange-traded funds that hold stocks in China and spoke to industry experts about what the stimulus efforts might mean for investors.

More coverage and reaction:

David Tepper is buying 'everything' in China: 'ETFs... futures... everything'China stock-market jump may be 'tradable rally' - but approach with cautionCommodities Corner: China stimulus plans spark a commodities rally, but a global soft landing still isn't a sure bet

Another great year for U.S. stocks sets up a warning

Through Thursday, the S&P 500 SPX was up more than 20% for 2024, excluding dividends. This follows a gain of 24% last year. Joseph Adinolfi reported on the historical significance of this two-year run and what it might mean as investors look ahead.

More coverage of markets:

For traders: Stock-market indicator with a near-perfect track record is flashing a 'buy' signalInvestors see risk that inflation hasn't been beaten yet

Acting HUD secretary talks about increasing housing supply

Aarthi Swaminathan interviewed Adrianne Todman, acting secretary of the U.S. Department of Housing and Urban Development, who talked about new government initiatives to increase availability of housing.

The Big Move: We're empty-nesters. Should we buy a house with cash - or take on a mortgage and invest?

The soaring bond market

Declining interest rates provide a strong underpinning for bond prices.

Christine Idzelis covered developments in the world of actively managed bond ETFs.Ciara Linnane shared some surprising information about Boeing's bonds. And here is a deep look at high-yield municipal bonds, including those issued to back the development of the Brightline high-speed rail service in Florida.

Read on: Another reason Qualcomm shouldn't buy Intel? Its bonds could reach junk status.

AT&T has been soaring - its chief operating officer explains

Above is a chart showing price movement for shares of AT&T Inc. (T) over the past three years. The stock closed at $21.65 Thursday and was up 29% for 2024, excluding dividends, and up 61% from the three-year closing low of $13.45 on July 18, 2023, according to FactSet. That low followed a dividend cut in 2022, when the company completed a complicated deal to spin off WarnerMedia, which was merged with Discovery to create Warner Bros. Discovery Inc. (WBD).

AT&T pays a quarterly dividend of $0.2775 per common share, for a yield of 5.13% as of Thursday's close. A declining interest-rate environment might bode well for a stock with an attractive dividend, but the company's chief operating officer Jeff McElfresh said this business focus at AT&T was helping even more, in an interview with Emily Bary.

A different way to play the AI build-out

Nvidia Corp. (NVDA) dominates the financial media's coverage of the deployment of hardware by data centers to support their corporate customers' efforts to develop artificial intelligence technology. This is because Nvidia doesn't yet face threatening competition for graphics processing units, which are large and expensive pieces of equipment with thousands of parts.

And that is where another opportunity lies for investors, according to Oppenheimer analyst Edward Yang. He recommended these two stocks of companies providing advanced chips needed by Nvidia and its competitors, amid a "severe, structural shortage" for these items.

Related coverage:

Nvidia's stock looks even better after this latest bullish signal, analyst saysMicron's stock could see its best day in 13 years. What's behind the big move.

The Ratings Game

The Ratings Game column provides daily commentary from analysts who explain current market action while looking further out. Here are examples from this week:

PayPal's stock is having its best year since 2020, and this is a big reason whyCostco's sales are strong, but valuation 'leaves no room for error,' says analystAlphabet's stock has never been this cheap relative to Meta's. How to play that.Starbucks' stock rises on upgrade. Coffee chain set for 'grande comeback,' an analyst says.

Bank executive explains a high stock valuation

Steve Gelsi interviewed Dimitar A. Karaivanov, the chief executive of Community Financial System Inc. (CBU) of DeWitt, N.Y., who described the bank's "unique" business model.

A look at CBU's ratio share price to book value, within a group of 74 stocks in the KBW Nasdaq Bank Index BKX and the KBW Nasdaq Regional Banking Index XX:KRX, led to this screen: 11 favored bank stocks that still trade at cheap valuations.

Retirement and estate planning

You have probably heard of an irrevocable trust, which can be used as an estate planning tool and for other purposes. But that word "irrevocable" can be alarming, because things happen in life and changes may need to be made. Beth Pinsker explains how irrevocable trusts can be changed.

More on retirement and estate planning:

My husband's pension was $8,000 a month. As his survivor, I only get $1,800. Can I fight this?'I am beyond hurt': If my husband and his son die, his house will go to his daughter-in-law. Is this nuts?'We have no health insurance': My wife died, leaving behind a lot of medical debt. Am I responsible?

Is it possible for Musk to put humans on Mars in four years? How about six years?

SpaceX CEO Elon Musk left himself some wiggle room when he said in a posting on X that he was planning to launch "about five" uncrewed Starships sent to Mars in two years, with a crewed mission to land on the red planet in four years, or possibly in six years.

James Rogers interviewed Eileen Collins, who commanded the Space Shuttle Discovery in 2005 for NASA's first shuttle flight following the 2003 Columbia disaster. She spoke about Musk's timeline and how realistic it might be.

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-Philip van Doorn

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09-27-24 1230ET

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