Skip to content

China Consumer Stock Rout Signals Darkening Economic Outlook

  • Consumer discretionary stocks lag benchmark, global peers
  • Weak consumption reflects Covid restrictions, income worries
A pedestrian in a near empty shopping street in the Futian business district in Shenzhen, on Sept. 2. 
A pedestrian in a near empty shopping street in the Futian business district in Shenzhen, on Sept. 2. Source: Future Publishing/Getty Images

Covid restrictions are stifling spending in China’s vast consumer market and turning some popular retailers and automakers into stock laggards.

The outpouring of pent-up demand has been absent in Covid zero China. Instead, an uncertain growth outlook, coupled with record high youth jobless rate, has caused consumer discretionary stocks in the MSCI China Index to underperform the broader gauge this quarter. That’s a stark contrast to a double-digit gain for a global consumer index.