【Weekly wealth trends】Rising Tensions: Is Another Pullback Coming?

Hello, Tigers!

On February 21, the White House released a presidential memorandum on its "America First" investment policy, imposing strict restrictions on investments related to China. These cover high-tech, information networks, and infrastructure, marking the toughest U.S. investment policy against China to date.

With Trump ramping up pressure, market volatility is rising. Will the revaluation wave of Chinese assets continue? How should investors navigate the short-term market adjustments? Let’s break it down:

1.Impact of the “America First” Investment Policy

The U.S. government’s memorandum outlines three key measures:

• Restricting Chinese investments in U.S. high-tech sectors, especially AI, semiconductors, and cloud computing.

• Blocking Chinese companies from raising funds in U.S. stock markets, limiting capital inflows into Chinese firms.

• Tightening regulations on U.S. investors to prevent indirect funding of China’s tech development.

The policy aims not only to curb Chinese investments in the U.S. but also to restrict American capital from flowing into China’s key industries.

While this triggered short-term capital outflows and market adjustments in Hong Kong and A-shares, long-term confidence in Chinese assets remains strong:

• AI and tech remain global investment hotspots, with DeepSeek’s rise driving a reassessment of Chinese AI assets.

• Domestic policies continue to support technological innovation and industrial upgrades, reducing reliance on foreign capital.

• Global supply chain shifts still favor China’s strengths in new energy, AI, and manufacturing.

In the short term, market volatility is inevitable, but the long-term revaluation trend of Chinese assets remains intact.

2.NVIDIA Earnings to Set the Tone for Tech Stocks

NVIDIA will release its earnings after Wednesday’s close, a key event not just for the company itself but also for the broader tech sector.

On February 24, Morgan Stanley analysts noted that demand for NVIDIA’s Hopper chips has rebounded over the past two months, and progress on GB200 is improving. While export controls could lead to cautious guidance, NVIDIA’s fundamentals remain strong, even more optimistic than two months ago.

Previously, concerns about slowing Hopper sales and early-stage challenges for the GB200 chip raised doubts. However, Morgan Stanley now sees these concerns easing. Their research indicates that cloud service providers’ demand for Hopper remains solid, with some international buyers even accelerating orders due to export control worries. This trend supports NVIDIA’s performance.

Morgan Stanley views this quarter as a transition period, expecting revenue around $42 billion, in line with market forecasts. They anticipate stronger guidance for the coming quarters, predicting a positive momentum shift once export restrictions stabilize. Analysts maintain an “Overweight” rating on NVIDIA, with a price target of $152, implying a 13% upside from current levels.

3. This Week’s Investment Strategy

Stay tuned for more insights and let us know your thoughts in the comments! 🚀