KWEB Stock Recent News

Josh Brown joins CNBC's 'Halftime Report' to share why the Chinese internet ETF is his 2024 contrarian pick.

There's some evidence that the 1% tax on share buybacks implemented by way of the Inflation Reduction Act dampened repurchase activity in the U.S. last year. Investors looking for corners of the market that are still homes to robust buyback activity might want to consider China.

The batch of tech giants known as the "Magnificent Seven" regained some of its momentum at the end of last week.

China stocks rebounded since January, outperforming the S&P 500 ETF but remain in a protracted downtrend since early 2021. KWEB sports very weak momentum but a low PEG ratio, suggesting that it could be a solid long-term value. But with a bearish chart and a risky allocation, I see the ETF as a hold until momentum improves.

Often said that China internet stocks trade at lower multiples than comparable U.S. firms. It's also said that  the former offer similar or higher rates of growth at more attractive valuations.

While electric vehicles have seen more muted demand in the United States, the same cannot be said for China. Chinese automaker BYD recorded sales of more than 600,000 electric vehicles in the first quarter of 2024, highlighting China's notable demand for climate-friendly vehicles.

The California Carbon Allowances (CCA) cap-and-trade program may be expanding its market coverage. On Wednesday, the state of Washington's Department of Ecology announced intent to discuss linking the CCA program with Washington's carbon allowance initiatives.

Media coverage of China's economic struggles may be overshadowing some bright spots worth discussing. While, the real estate situation in China has dampened its economy, recent positive news about Meituan (MPNGY) pushes back on that narrative.

2024 has marked a pivot of economic conditions that investors should consider. Over the past two years, we saw rampant inflation, rapid rate hikes, negative real rates, an earnings recession, tight corporate balance sheets as wages increased, and a recession that never manifested.

The U.S. stock market has done so well that many investors may have forgotten about the rest of the world. Emerging markets, however, have a case to get back into investors' portfolios.