Jared Woodard is here he's head of the research investment committee and ETF strategy at Bank of America Securities Jared welcome you want to go up against Tepper like that hey Kell it's good to be with you look I think there's uh there's always opportunities in the market and our view today is that whether it's monetary easing in the United States or or easier policy in China these can be incredibly powerful in the very short term um but but probably aren't the number one place to commit Capital today for anyone who's looking for big Returns on
a six or 12 month time frame or I was uh sort of took note and I'm sure you did as well that Stanley dren Miller remains I don't know if you'd say bearish but not excited about the possibilities in Chinese stocks he said until there's a leadership change with Xi Jinping and I I'm sure many people share that view I think it's it's also about the the the broader economy in China this stimulus package is of course a positive but our our Economist in China our strategist at Bank of America and and other colleagues investors
we speak to all have the same view which is that the fundamental economic challenge faced by the Chinese economy are are not resolved by these stimulus measures if you don't have a robust consumer base um and you're exporting you know with the most growth toward other Emerging Markets that's that's not been the kind of recipe for incredible dynamism for Chinese equities and I think it's worth noting it was not that long ago just last month that Chinese government bonds had an all-time low record 2.0% yield uh the government was I think policy makers were pretty
stressed out about this uh you could interpret some of the stimulus I think as an effort to divert flows of capital away from the bond market from deflation toward the stock market and we we don't have the view that um this is the kind of fiscal uh bazooka as it were that would give you multi-month multi- quarter sustained economic growth you know beyond the trend level so are you in it anywhere for a trade or are you really on the sidelines here well I appreciate the comments from Dominic earlier you know when you have markets
that are closed or in liquid uh or where you you don't have the kind of transparency in data uh accounting data or earnings data Etc that investors in the United States might be used to I think it makes those trades even riskier than they already are there's a lot of ways to to benefit if you see sustained economic growth in China or even earnings from their companies in terms of order orders around the world I think that those second order derivative Investments whether it is in Australia or Latin America or Commodities might be a better
way to play any upside that does happen without requiring the kind of uh challenges that sometimes happen when investors overseas try to get active in Mainland Chinese equities yeah I know that makes a lot of sense you're looking elsewhere as well for you know kind of areas of the markets that have actually outpaced the triple Q's this year you think still have upside and they range everything from National Defense stocks to us industrial renewal plays nuclear power kind of fitting in with that and then you're still bullish on Japan that's right I mean everyone has
Artificial Intelligence on the brain but I think it might be interesting news that there all of those trades you just mentioned there's been big bullish positions of ours for a while have actually outperformed uh the the the growth stocks this year most most portfolios are weighted something like 70% toward growth equities but we see better opportunities elsewhere in Japan for example you've had massive corporate reform when I speaking at our Japan conference last month it was interesting how many investors think that we're still only in the third or fourth inning of those big reforms you're
seeing record BuyBacks record cacks among Japanese companies and on our estimate there's something like 33% of GDP still locked up in cash on corporate balance sheets in Japan as those reforms work through I think you can expect much more structural upside in those equities much more productivity and earnings potential in that market yeah we showed the other ways you like to play these but again Japan was kind of uh preceded China in many of the measures that China is now taking to try to boost its stock market as well so with perhaps a little bit
brighter Story to Tell in the long run Jared we'll leave it there for now thanks for joining us today thanks Kelly Jared Woodard with BFA securities
