Mackenzie Minute: June 3, 2016
Mark Grammer, Lead of the Mackenzie Growth Team, discusses the strength of the Chinese economy and which global developments you should watch for.
In the last week the Chinese market the Hang Seng in particular was strong, up four out of the last five days. I was in China, the week before last what I saw during that week of visiting companies and cities, was a much better economy than the press is leading us to believe.
The Fed will be meeting on the 14th and 15th of June, and there's a good chance they will raise rates. That will have a strong impact on the U.S. dollar, which could bring the weak Chinese Renminbi back into the limelight. That had created some concern for the global markets if the Chinese were devaluing the currency. The impact that would have not only in China, but in the emerging markets. And we're going to keep a close eye on that.
In the Mackenzie Global Growth Fund and the Mackenzie International Growth Fund, we do have companies that have exposure to Chinese economy, particularly consumer stocks like Nestlé, Reckitt Benckiser, BMW and Givaudan. And, they will be impacted if the currency weakens in a translational impact. But, since we don't think the currency will weaken that dramatically, we think that the impact will be limited.