“So, it is very difficult for the markets to try and get a grip on where policy is going, and that, of course, is going to lead much more to risk-off than risk-on,” he said.
The Magnificent Seven stocks include Apple, Microsoft, Google parent Alphabet, Amazon, Nvidia, Meta Platforms, and Tesla.
Harris expects some weakness in the US market but does not foresee a major crash. Instead, he predicts a prolonged period of slow growth.
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“I have been saying for three or four months now that we are in an era of the great pivot, we have seen the US be very strong now for 3-4-5 years, easily outperforming the rest of the world, and very much outperforming China, which is still suffering from its post-COVID malaise,” he said.Harris said that China has been making significant efforts to boost its economy. Some indicators suggest these efforts are working, and as a result, more money is flowing into the stock market.
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“It looks, from some of the indicators, that they are doing quite well on that. As we all know from reflation a lot of that money ends up in the stock market and the investment market. So, far in China tech, but it is likely to see more and more money going to the markets, which means that the Chinese market is likely to outperform the US. So that is where the pivot occurring is seen,” he said.
Harris also commented on the Indian equity market, saying that while China might attract more investor attention, India remains a strong performer.
“There is, obviously, some competition from China now as a big emerging market (EM), although you can hardly call China EM; these days you can almost not call India EM, but there is concern that those markets are mildly competing. So, investors looking towards China might be distracted away from India for a little bit, but personally, I am not terribly concerned. I think the Indian economic story is still intact. But of course, markets do not go up in a straight line,” he added.
For the entire interview, watch the accompanying video
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