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Barclays has identified a handful of European stocks poised to benefit from China's anticipated economic stimulus measures. Mainland Chinese stocks jumped on the news. The investment bank suggested that China's current economic climate resembles April 2024, when Chinese and China-exposed stocks experienced a significant rally. According to Barclays, U.K.-headquartered insurer Prudential , cosmetics giant L'Oreal , carmakers BMW and Mercedes , and miner Rio Tinto are among the top European stocks that could benefit from China's stimulus efforts. China's recent economic challenges have been evident, with the country experiencing its longest period of deflation since 1999.
Persons: Anshul Gupta, Larry Hu, Hu, — CNBC's Michael Bloom, Evelyn Cheng Organizations: Barclays, People's Bank of China, Prudential, L'Oreal, carmakers BMW, Mercedes, Rio Tinto, U.S, Prudential plc, Macquarie Locations: China, Rio, China's
With the comeback in technology stocks likely to fade, Barclays says it's time for investors to consider an options strategy that would capitalize on their decline. Investors in recent weeks have flocked to tech stocks — particularly megacaps — as a safe haven amid the banking turmoil rattling markets. Given this backdrop, Barclays recommends fading this rally and betting that tech stocks will go down, using the Invesco QQQ Trust — which tracks the Nasdaq-100 index. The put spread, however, caps the upside of the trade, because if tech stocks fall substantially, the second put will get exercised. "Specifically, we suggest buying QQQ May23 305/260 put spreads ... with a max payout ratio of 4.9:1," Gupta said.
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