China's Stimulus Impact on Tech Stocks and Intel's Struggles

Chinese tech stocks surged this week as investors reacted positively to potential government stimulus.

### Chinese Stimulus and Intel's Struggles: Market Reactions and Investor Sentiments
* 📈 The Chinese government's announcement of stimulus measures has significantly impacted consumer-facing technology companies, with JD.com seeing a **remarkable 34% increase** this week alone.
* 📞 Investor interest has surged, leading to numerous inquiries about the Chinese market, especially after a period of **pessimism regarding Beijing's economic strategies**.
* 💭 Analysts are questioning whether the recent market movements indicate a **stabilization** or if the Chinese authorities will provide **continued support throughout the year**.
* 💻 In tech news, Intel has faced challenges, including a **rebuffed acquisition approach from ARM**, highlighting its ongoing struggles and a **52% drop in stock value**.
* 📉 The rapid decline of Intel, once a leading figure in chip manufacturing, raises concerns about its **competitive edge** in the **fast-evolving tech landscape**.
* 🧐 Investors are increasingly favoring index exposure to **mitigate risks**, particularly in light of potential market volatility and shifts in focus from tech to **more defensive stocks**.
* 🔄 The current market climate emphasizes the **importance of being agile and responsive to rapid changes**, especially with the contrasting performances of tech stocks and broader indices.

It's kind of a simple story, right? Chinese government says stimulus and those kind of more downtrodden consumer-facing Chinese technology companies react, particularly the leaders. How many phone calls have you had across your desk this week about China and that corner of the market? Oh, huge. I mean, that's been the main story this week. It's followed on as well, obviously, from the Federal Reserve the previous week. So we quickly swung attention over to China. And as you said, those ideas, I mean, we've seen some phenomenal moves. Just take, for example, JD dot com, that's up 34% this week, up 9% today. I mean, we've seen some really strong moves than the market's been and investors have been keen to pick up on those, especially given the sort of downbeat mood that there had been towards China prior to this week. You know, there's really had been that sense that Beijing wasn't going to

get its act together to really pull out that bazookas hype and a sized stimulus that the market was actually looking for. And this week we actually got a sense that perhaps that's actually going to be happening. That's what we've seen. I mean, the big question here I think now is, is this a stabilization move or is this something that we're going to see? You know, the Chinese authorities really support going through the rest of the year. If you're just joining us here and Bloomberg Technology, our top tech story today is a Bloomberg report that ARM made an approach to Intel that Intel rebuffed, all according to a single source. When you woke up to that news this morning, Fiona, what was your reaction? Well, no. I mean, Intel has definitely been in the news this week. I mean, you know, well, this is a stock that's really down in the doldrums.

It's really been struggling. It's obviously been approached by several suitors. And this is just the latest now. I mean, it all seems a little bit murky, an unknown where this might be going as far as we know that there it's it's not moving forward yet. But but I think, you know, if we consider what's happened to the valuation of Intel, obviously, it's down in the dumps right now, and it doesn't really look like the turnaround plan is really going to do the job that it needs to. Is that does mean that Intel remains vulnerable. We're showing a long-term yesterday chart, down 52%. I want to take that step back, Fiona, because it is extraordinary that the icon, one of the icons of chip making, would ever be being discussed as an acquisition or merger target. Intel of all names. Fiona, how much does that sharpen your investors' minds that this current move

of AI is so swift? You've got to be on top of it? Yeah, that's a really good point. And I mean, you know, if we just think about where Intel was compared to, for example, its peers, you know, it was always the riding high, the strong horsemen, and that's no longer the case. And it has been a relatively rapid decline this year, as you pointed out, you know, 50% of its value lost. And at the same time, we've seen a huge rally in the valuations of those more focused stocks. And so that just really highlights that point that, you know, this may I and it's a rapid moving one and you have to be on the bull with that. And you know, well, I think Intel's just lost the edge as far as its tech edge is concerned. It's just losing the bull there. And that really obviously hasn't helped the share price at all.

If you did that for your clients, do they want single-name exposure? Do they want to be stock players in this market, stock pickers, or do they want to go broader? They do want to have index exposure so they don't get caught out if the wind turns? Yeah, you know, we have seen a lot of preferential preference towards index stock just for exactly indices. Sorry, just for that reason. In order to be able to mitigate risk, there is always that concern of being caught out. Now, obviously, there are some favorites. Where are traders and investors sort of, you know, happy to go into the single stocks. But more broadly speaking, we have seen more of a focus on indices. And that also allows for when we sort of move towards rotations. You know, I think particularly with what's going on with China this week and what we've seen as concerns in the US previously about sort of, you know, moving towards a potential hard landing.

In some cases with the weaker-than-expected jobs data at the start of the summer. You know, that idea that we might see rotation if you're in an index that does allow you to benefit from these rotations, potentially out of tech into assets, or out of tech into, for example, more defensive stocks, if we find that the data goes the wrong way.

China Stocks Set for Best Week Since 2022

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Chinese Tech Companies React to Government Stimulus

The Chinese government's stimulus announcement has led to a significant rebound in consumer-facing tech companies, with JD.

Investors have been eager to capitalize on these strong moves, reversing the previous downbeat sentiment towards China.

The big question now is whether this stabilization will continue and if Chinese authorities will provide ongoing support for the rest of the year.

Intel has been struggling with a significant decline in its valuation, down 52% recently, and is now being approached by potential suitors for acquisition.

The company's turnaround plan does not seem effective, leading to a loss of its dominant position in the chip-making industry.

Meanwhile, competitors focused on AI have seen a rally in their valuations, highlighting Intel's loss of tech edge and its impact on the share price.

Clients are leaning towards index exposure to mitigate risk and avoid being caught off guard by market changes.

While there is interest in single stocks, the overall focus has been on indices.

This strategy allows for smoother transitions during market rotations, especially in light of recent concerns in China and the US.

Weaker-than-expected jobs data at the start of summer may lead to a rotation in stock indexes.

This rotation could shift investments from tech stocks to more defensive assets.

The potential change in data could drive this shift in investment strategy.