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Market Tips: Watch out for China Bubble

CNBC.com
Wednesday, 29 Jul 2009 | 5:15 AM ET

Global stocks were mixed Wednesday, as a major selloff in China dragged down oil prices. Experts tell CNBC that although they expect Asian and US markets to trade higher in the long term, it might be good to add some cyclical plays to investors' portfolios.

Risk of China's Bubble

The market needs to take note of the growing concerns of a big bubble in China, particularly in stock and real estate, says Rhonda Staskow, senior currency analyst at Action Economics. She tells CNBC that it could be a risk for the Aussie dollar.

Target Top Quality Cyclicals

Douglas Cairns, Far East & global emerging markets investment specialist at Threadneedle recommends a pro-cyclical tilt in a portfolio that is balanced by defensives such as telcos and healthcare stocks.

Asian Market Likely to Post Further Gains

Asian markets will continue to move upwards for the rest of this year and into the next, believes Julian Galvin, associate director at Tyche.

China M&A Outlook

The auto sector is seeing the most consolidation in China, according to Danny Po, China national M&A tax leader at PriceWaterHouseCoopers.

Oil Price Direction

Azlin Ahmad, editor, crude oil at Argus Media believes oil prices could breach the $70 a barrel mark.

In Favor of ConocoPhillips

King Lip, portfolio manager at Baker Avenue Asset Management is in favor of ConocoPhillips.

Commodity Currencies Make Better Bets

David Mann, forex strategist for global markets at Standard Chartered Bank says fundamentals suggest dollar weakness and he believes commodities-linked currencies and select Asian currencies are the better bets for now.

US Dollar Drives Gold Prices

The price of gold and precious metals is closely related to the U.S. dollar. Nader Naemi, senior investment strategist at AMP Capital tells CNBC he sees the price of gold will head up when the greenback heads down.

Aussie-Dollar Looks Overbought

The Aussie-dollar looks overbought, says Jan Lambregts, global head of financial markets research at Rabobank International. He tells CNBC that the cross may correct up to 10% before the end of the year.

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