Kingsview CIO Scott Martin discusses comments from China’s President Xi, and the influence recent events have had on Chinese stocks.
Program: Cavuto Coast to Coast
Station: Fox Business News
NEIL CAVUTO: So it’s really a it brought in this selloff that ensues right now, not as bad as it was when we’re off with more than 500 points, the Dow up about 250 points. The Nasdaq has taken on the chin. Technology stocks in particular have been saying take it on the chin. This actually began in China overnight, in Asia by extension, after people saw what was happening. The technology sector there. And China might lay a lot of the blame for this on the reversal of fortunes and its once thriving technology arena because it’s clamping down on technology. And that is not only hurting Chinese investments there, but now technology in general everywhere. Scott Martin back with us. Luke Lloyd, back with us. You know, Luke, I mean, the Chinese might have started this, the interest rate thing notwithstanding, by cracking down on their own offerings to say nothing of what they used to do to Alibaba and all the rest showing more their military concerns than their economic ones. What do you think’s going on here and how long does it last?
LUKE LLOYD: Yes, so I talked to earlier about how you should stay away from international companies. I think China is where you should stay away from the most. You know, China probing US companies should absolutely. One hundred percent concern investors. You shouldn’t be buying Chinese stocks at this point. The regulatory headwinds that could come from both sides aren’t worth the risk DiDi listing over here in the US then being taken off the App Store in China was a big middle finger from China. They could have done that before the IPO, but they chose to wait. And then the US is already talking about reacting by withdrawing the ADR from the US exchanges. I like to invest in free market countries and China is not that at the snap of a finger they can choose to destroy a company. And unless a company was trading an extremely low valuation at a price that I was willing to pay, I wouldn’t be a buyer.
CAVUTO: It’s very, very interesting, you know, Scott, what’s also interesting is the fact that either China doesn’t much care or it wants its cake and wants to
eat it, too, which is a dumb expression because you have the cake, please just eat it. But I digress. I’m wondering whether China, you know, played this out in their heads and now is shocked at the market fallout to say nothing of growing US pressure to crack down on this sort of stuff, as Luke said, maybe just not to buy their stuff all together. What do you think?
SCOTT MARTIN: Well, it’s a hard thing to avoid, typically, because a lot of companies do business in China. China is on pace to be the largest economy in the world in a matter of years. Billions of people, obviously, the companies want access to. I’m not sure China even lets their people eat cake, Neil, which means there’s more for us in the United States. But if you look at President Xi comments just about a week ago at the 100th anniversary celebration, I guess you’d call it a party on Chinese terms. You know, the things that he said at that at that presentation were actually pretty shocking, pretty aggressive, pretty militaristic and pretty scary for the rest of the world. So when you look at what China is doing, whether they mean to cause an uproar or whether they mean to cause selloffs or not, I don’t think they really care. Neil, I think China is ready to take on anyone and everyone, and it’s something we should all be aware of with respect to how the markets, at least initially, at least as we started to figure out who the real state President Xi is, as the markets have started to figure that out, they haven’t liked what they’ve seen so far.
CAVUTO: All right, good point, gentlemen, I’m sorry to truncate this, but with this breaking news, unfortunate, we have to. We’re going to.