Everyone is now focused on mainstream Chinese stocks and their rallies resulting from the recent 50 basis point interest rate cut that the government just implemented there. However, these trades in names like Alibaba Group or Baidu Inc. might be getting a bit too crowded now. So, the next logical step is to look at the falling dominoes.
In this case, investors need to lean on the fundamentals of Chinese growth and its effects on other economies that support it, such as oil and steel exporters, or any commodity-based economy for that matter. Because China draws over a third of the world's oil demand, and its infrastructure demands are one of the biggest in the world as it is still a nation in its building, investors might want to focus on Brazil and even Australia to find potentially bullish trends.
It is stocks like Vale (NYSE: VALE) acting as a steel and iron ore maker, which exports a large amount of its inventory to China, or companies like BHP Group Ltd. (NYSE: BHP) in the basic materials sector from Australia exporting more metal needs to China, and even the unlikely Exxon Mobil Co. (NYSE: XOM) in the United States acting as a support pillar in China's energy sector.
Key Tailwinds Position Vale Stock to Outperform the Market
Understanding that Brazil is now under new presidential leadership is vital. The ties between Brazil and China are stronger under this new administration, and therefore, exports from Vale may be one of the most bullish tailwinds that could hit the company in ...
