178.57 -0.43 (-0.24%)
Pre-Market: 8:28AM EDT
|Bid||178.58 x 800|
|Ask||178.80 x 1000|
|Day's Range||176.05 - 179.12|
|52 Week Range||129.77 - 195.72|
|Beta (3Y Monthly)||1.87|
|PE Ratio (TTM)||51.19|
|Earnings Date||Oct 31, 2019 - Nov 4, 2019|
|Forward Dividend & Yield||N/A (N/A)|
|1y Target Est||223.03|
Interested in IPO stocks like Uber, Beyond Meat, Zscaler and Peloton? Learn lessons from Facebook, Alibaba and Snap before investing in IPO stocks.
Investors may be overlooking or underestimating the impact of “key opinion leader”-driven content models for the Chinese e-commerce company, specifically from its partnership with TikTok company Douyin, which could achieve gross margin value of more than $14 billion a year, Chung said in a Monday note.
Microsoft's (MSFT) IoT initiatives aimed at providing robust tools and platform to developers, and strengthening partner base will aid it in improving overall performance.
(Bloomberg Opinion) -- Selling infant formula to China seems so 2016.The country abandoned its one-child policy three years ago, spurring expectations of a baby boom. These have been well and truly dashed. Fertility rates remain stuck around the levels they’ve been at for two decades, and the 15 million children born in 2018 was the lowest figure since 1961. Roughly five Indians are born each year for every three Chinese.So what’s the country’s second-biggest milk producer China Mengniu Dairy Co. doing paying an Amazon.com Inc. valuation for milk-powder producer Bellamy’s Australia Ltd.? The answer tells you a lot about the changing prospects for the Chinese consumer.Bellamy’s, which makes organic milk and infant foods and first sold shares to the public as recently as 2014. Mengniu’s cash offer, which Bellamy’s board has recommended, is a 59% premium to the last pre-deal closing price and values the company at A$1.5 billion ($1 billion), about 30 times its Ebitda in the last fiscal year (Amazon gets just 27 times).Formula producers such as Bellamy’s, Nestle SA, and Danone SA have gone through a rough patch in China recently, driven by the slowing birth rate and a general softening in consumer spending.China’s retail sales grew just 7.5% from a year earlier in August, the National Bureau of Statistics reported Monday, the second-slowest pace since the SARS epidemic in 2003. Fixed-asset investment in food processing plants year-to-date slumped 9.4% from a year earlier, suggesting companies see dismal prospects for growth.So what’s so special about Bellamy’s? For one thing, it still benefits from the long shadow of China’s 2008 tainted-milk scandal, when products including those made by Mengniu, its majority-controlled affiliate Yashili International Holdings Ltd., and arch-rival Inner Mongolia Yili Industrial Group Co. were found to have contained the toxic chemical melamine.That’s made foreign-branded infant formula such a hot commodity in China that Australian retailers have had to implement maximum-purchase rules to stop the booming buy-overseas, post-back-home trade from clearing their shelves.That’s not enough on its own, though, given the general headwinds. After all, Mengniu tried to capitalize on this trend back in 2015 when Yashili invested 1 billion yuan ($141 million) in a New Zealand factory. The mid- to high-end image of the Kieember and Kieevagour brands produced there clearly haven’t been a Bellamy’s-level success.Yashili announced plans to sell a 49% stake in the New Zealand business to Danone for the equivalent of about $201 million last December, but the sale was canceled last month amid unsuccessful attempts to strike a broader agreement between the two companies. While the valuation uplift was clearly a positive, it’s notable that neither side was desperate to gain or retain control of the asset without getting something else in return.What makes Bellamy’s different is that it eschews the mid-range altogether. Its cans of formula sell on Alibaba Group Holding Ltd.’s Tmall marketplace for 50% more than shoppers pay in Australia, where the organic branding means it’s already a premium line. It’s not so much a bet on China’s baby boom, as on growing wealth disparities and rising affluence in a country that already accounts for a third of the world’s luxury spendingEven in that context, Mengniu will struggle to make a good return on its investment. The company plans to invest to increase capacity and drive sales, Chief Executive Officer Minfang Lu said in a statement. That’s easier said than done, given that it takes three years to convert dairy farms to organic production. Australia is a relatively small organic milk producer, with output of about 50 million liters in 2017 compared with 880 million liters in China, according to KPMG.Mengniu will need to be confident this brand can hold its own against Yili, Nestle and Danone at the top end of a fiercely competitive Chinese market. Three-quarters of its revenue at present comes from sales in Australia. While Bellamy’s is often treated as a play on Chinese demand, it’s not there yet.Shareholders in the target would do well to sell into this offer. Those in Mengniu should hope they don’t end up crying over spilled milk.To contact the author of this story: David Fickling at email@example.comTo contact the editor responsible for this story: Matthew Brooker at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.David Fickling is a Bloomberg Opinion columnist covering commodities, as well as industrial and consumer companies. He has been a reporter for Bloomberg News, Dow Jones, the Wall Street Journal, the Financial Times and the Guardian.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
(Bloomberg) -- Sign up for Next China, a weekly email on where the nation stands now and where it's going next.For decades, NetEase Inc. has been the perennial runner-up to the likes of Tencent Holdings Ltd. in China’s evolving internet landscape. Now it’s betting on a bookish computer scientist to catapult it to the top of the class in the nation’s $36 billion online education market.Zhou Feng, chief executive officer of NetEase Youdao, is charged with helping NetEase escape from under Tencent’s enormous shadow and find life beyond video games. The U.S.-trained software coder handpicked by billionaire founder William Ding Lei is creating an all-in-one learning platform to tap the lucrative space where education and technology overlap. To bankroll that expansion, the company could float Youdao, last valued at $1.1 billion, as soon as this year.Zhou is counting on a decades-old custom. Every summer, millions of Chinese high school students sit through a grueling two-day college entrance exam, or gaokao, that helps determine the course of their lives. That’s why China’s tiger moms and dads have long sent their kids from as early as kindergarten age to private tutoring classes for English, math and sciences.Intense competition has fueled an education boom, particularly targeting the K-12 group that includes students from kindergarten through high school, creating a coterie of multi-billion-dollar corporations. Leading players like New Oriental Education & Technology Group Inc. and TAL Education Group that still rely mainly on in-class teaching have gone public in the U.S. and seen their shares soar. Online startups such as the Tencent-backed VIPKid are still trying to convince parents that digital instruction can be as good, if not better than brick-and-mortar classrooms.Through combining content with the latest technology, Zhou sees a business chance for Youdao, whose name loosely translates to “there’s a way”. Courses can be taught through high-speed live-streaming, enabling smooth communication between teacher and student. Artificial intelligence-powered “tutors” can grade homework and use data to evaluate student test results, he said.“That’s what we have always been good at,” said Zhou, 40, a University of California at Berkeley alumnus with a penchant for blending English words into conversations. “Almost every industry in China has been transformed by the internet, but that’s not yet the case for education.”Revenue for China’s online education market is estimated to have reached around 252 billion yuan ($35.7 billion) in 2018, and is expected to more than double in 2022, with 264 million paying users, according to iResearch.But there’s yet to be a clear winner -- even for top tuition providers like New Oriental, its digital arm Koolearn in 2017 only accounted for less than 1% of the total revenue in the local online teaching market, according to Frost & Sullivan data cited in its prospectus. What sets Youdao apart is its exclusive focus on online and its expansion into education-related hardware. It has launched a slew of products from apps for note-taking and children’s stories to smart devices like a 799 yuan electronic dictionary pen, which allows students to scan printed text and translate it instantaneously.“NetEase’s technology support and the company’s online DNA and roots should make its products more sophisticated than traditional education providers,” said Bloomberg Intelligence analyst Vey-Sern Ling. Still, not having physical classrooms means it could be difficult for Youdao to expand beyond structured, standardized learning or test prep, he said.NetEase could do with a win. Founder and CEO Ding has a master plan for China’s second largest game developer to delve into three sectors including e-commerce, music streaming and online education, but the result is best described as mixed. Its music arm has grappled with rising content costs, as it has to sublicense a large chunk of songs from its much bigger rival, Tencent Music Entertainment Group. Although e-commerce has grown to become NetEase’s largest division after gaming in terms of revenue, it sold its popular import platform Kaola to Alibaba Group Holding Ltd. in a $2 billion deal.That magnifies the importance of Youdao and its leader, with whom Ding shares a long history. Back in 2004, when Zhou was pursuing his doctorate degree in computer science, NetEase’s CEO came across his paper on filtering junk emails, and, ironically, shot him a message that was mistaken as spam. It had no body text but just a subject line: “I’m Ding Lei, I have a technical question for you.”The two eventually got in touch via phone calls, and Zhou worked part-time for NetEase for three years. After earning his doctorate in 2007, he officially joined the company as lead architect for Youdao in Beijing, which at the time was trying to morph from a digital dictionary into a web search engine. To challenge the local leader Baidu Inc., Youdao’s approach was to operate a slew of vertical search services at one time, in everything from news to blogs to maps.Those efforts failed, and in 2012 Zhou decided to close the search operation. “That was when we hit our lowest point,” he said. Zhou shifted the 400-person team to develop learning apps instead.Youdao’s revenue rose 60% in 2018 from a year earlier, while sales for K-12 courses increased three-fold in the same period, he said. Online courses have surpassed advertising as Youdao’s largest income stream, Zhou said.Now of the nearly 2,000 employees Zhou oversees at Youdao, half are teachers and other staffers dedicated to building up its online class portfolio. “Learning is much more difficult than playing video games,” he said.To contact the reporter on this story: Zheping Huang in Hong Kong at email@example.comTo contact the editors responsible for this story: Edwin Chan at firstname.lastname@example.org, Colum MurphyFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
The 10th of September was a day that some holders of Alibaba (NYSE:BABA) stock were dreading: Jack Ma, the company's flamboyant co-founder and chairman for 20 years, finally stepped down from his position on his 55th birthday. He'll continue to serve as as part of the 36-member Alibaba Partnership, but his influence at the company will be comparatively limited.Source: Shutterstock Today, Ma is worth an estimated $40 billion and Alibaba is a massive force in global e-commerce -- not too shabby for a start-up that began in a tiny apartment in the late 1990's. * 7 Tech Stocks You Should Avoid Now With Ma's departure, however, owners of Alibaba stock are left wondering whether CEO Daniel Zhang can keep the company's momentum going amid recent internal challenges.InvestorPlace - Stock Market News, Stock Advice & Trading Tips Hold On to Your BABA StockIt's tempting to panic in situations like this as markets don't like uncertainty and change can be scary. I would recommend a calm mindset and a long-term view, however, as Alibaba Group remains a solid, stable company even as it navigates its transition in leadership.Granted, Alibaba's reputation was, to a certain extent, predicated upon the cult of personality that Ma instilled in BABA shareholders. A bit of a wild card, Ma made an appearance in a kung-fu film, showed up at a get-together dressed like Michael Jackson, and even sang at a large music festival. During interviews he spoke frankly and charmed practically everyone he came in contact with.Along the way, Ma helped cement Alibaba's place in history, as the company's IPO in 2014 was and still remains the largest IPO in stock-market history -- $25 billion in American currency. Moreover, Alibaba reportedly had three times the sales of American e-commerce rival Amazon (NASDAQ:AMZN) last year.Thus, it's easy to see the parallels between Alibaba stock and Amazon; just imagine the shock and alarm that AMZN shareholders would feel if Jeff Bezos stepped down. And yet, I have no doubt that any downward price action in Amazon stock would be temporary; the same could be said regarding BABA stock, in my estimation. The Baton Is PassedI don't view this as Ma abandoning his company as much as him ushering Alibaba into a new phase of its development. The public might think of Zhang as a soft-spoken accountant, but Ma clearly thinks quite differently of Alibaba's new leader:[Zhang] has the logic and critical thinking skills of a super computer, a commitment to his vision, the courage to wholeheartedly dare to take on innovative business models and industries of the future.The fact that Ma handpicked him and is prepared to bet his legacy on Zhang should be highly encouraging for long-term owners of BABA stock. Still, I can understand investors' misgivings; the timing isn't ideal as China and the United States remain mired in a trade war that's taking a heavy toll on commerce and revenues in both nations. BABA Still the World's E-commerce LeaderNevertheless, even with the tariff battle raging on, Alibaba remains dominant in the global e-commerce space. Consider, for example, that even in the midst of a trade war, Alibaba's most recently reported earnings indicated a massive 51% increase in adjusted EPS compared to the same quarter a year prior. Not only that, but the report revealed that Alibaba's sales jumped 37% compared to the same quarter last year, reaching $16.73 billion -- no slowdown here, tariff war notwithstanding.Given all of that, analysts are understandably optimistic concerning Alibaba's growth prospects going forward. Indeed, they're projecting the company's EPS to increase by 16% in fiscal year 2020, followed by an additional 28% uptick in fiscal year 2021. The Bottom Line on Alibaba StockMy message to investors relates not only to BABA stock, but to the market at large: change doesn't always have to be perceived as a bad thing. I, for one, am feeling confident about Alibaba's future; Jack Ma's leaving, but the company's here to stay.As of this writing, David Moadel did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Recession-Resistant Services Stocks to Buy * 7 Hot Penny Stocks to Consider Now * 7 Tech Stocks You Should Avoid Now The post Buy Alibaba Stock with Confidence in the Post-Jack Ma Era appeared first on InvestorPlace.
Alibaba broke out above a buy point in a cup with handle on Feb. 22. The stock would go on to rise more than 100% from the entry.
(Bloomberg Opinion) -- Hong Kong’s IPO market is unexpectedly coming back to life. It may be a brief revival.Companies from Anheuser-Busch InBev SA’s Asian unit to Megvii Technology Ltd. aim to raise more than $10 billion selling shares before the year is out. It’s a turnaround that appeared improbable as recently as mid-August, when the Hang Seng Index erased its gain for the year amid anti-government protests and concerns over weakening global growth.Hong Kong’s benchmark stocks gauge has bounced 8% since Aug. 13, among the best-performing indexes worldwide in that period, as traders bet that China’s government will try to buoy investor spirits in the run-up to Oct. 1, when the country celebrates the 70th anniversary of the founding of the People’s Republic. That’s created a window of opportunity for companies that previously struggled to generate enough investor interest.Budweiser Brewing Company APAC Ltd. is the prime example. The unit of AB InBev, the world’s largest brewer, pulled what would have been the world’s biggest initial public offering in mid-July after failing to draw sufficient demand for the $9.8 billion sale. The company is back with a pared-down $5 billion offering and aims to list by the end of September, Carol Zhong, Julia Fioretti, Jinshan Hong and Crystal Tse of Bloomberg News reported last week, citing people familiar with the matter.The brewer is seeking to list minus its Australian operations, which the company agreed to sell to Asahi Group Holdings Ltd. for $11.3 billion soon after withdrawing its IPO in July. That hived off a slower-growing part of its operations, which may help attract investors who balked at Budweiser Brewing’s valuation last time around.Other than a rising stock market, a simple technical reason may account for the brewer’s haste to try again. A company that seeks to list within six months of its first application doesn’t need to prepare a new set of accounts, meaning Budweiser Brewing can just strip the Australian operations from its financials when pitching to investors this time around.Others lining up at the IPO well include Megvii, a Beijing-based artificial intelligence startup that’s seeking $1 billion; consumer lender Home Credit NV, which is targeting as much as $1.5 billion; Chinese sportswear retailer Topsports International Holdings Ltd., which aims to raise about $1 billion; and ESR Cayman Ltd., a logistics real estate developer backed by Warburg Pincus that earlier shelved a $1.2 billion deal. The first to list of the current crop may be biotechnology firm Shanghai Henlius Biotech Inc., which has already started taking orders for a $477 million sale.The biggest flotation of all may come in October, when New York-traded Alibaba Group Holding Ltd. will seek to raise as much as $15 billion in a secondary listing, Reuters reported last month.The resurgence in the IPO market is a tonic for Hong Kong Exchanges & Clearing Ltd., which has faced skepticism over its $36.6 billion bid for London Stock Exchange Group Plc and whose shares have dropped 16% from this year’s high. Hong Kong has slipped in the pecking order of global stock exchanges after topping the rankings in 2018. Companies raised $10.8 billion in IPOs this year through Sept. 13, less than half of the total in the same period last year.The question is whether there will be enough investor demand to soak up all the stock that an eager and growing group of listing candidates is waiting to thrust on buyers. Meanwhile, Hong Kong’s economy is deteriorating and the protests haven’t gone away. Companies must also consider whether China’s feelgood efforts will extend beyond Oct. 1.Time may be of the essence for this crowd. To contact the author of this story: Nisha Gopalan at email@example.comTo contact the editor responsible for this story: Matthew Brooker at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Nisha Gopalan is a Bloomberg Opinion columnist covering deals and banking. She previously worked for the Wall Street Journal and Dow Jones as an editor and a reporter.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
The Alibaba Group follows a business model that differs from e-commerce leaders in the United States and allows the firm to play the middleman to various types of buyers and sellers across the globe.
Over the past decade, Wall Street has witnessed the meteoric rise of Amazon (NASDAQ:AMZN). With a market cap of about $910 billion, AMZN stock is now one of the largest publicly listed companies. In the U.S. as well as in many other countries, it is the dominant online retailer. In recent years, Amazon has also expanded into other growth areas such as cloud computing where it has already become a leader.Source: Jonathan Weiss / Shutterstock.com However, since early July, long-term AMZN shareholders have been somewhat concerned with the stock's price action. On July 11, Amazon stock hit an 52-week high of $2035.80. On Aug. 26, it saw a recent low of $1743.51. Currently the Amazon stock price is hovering around $1850.Now many investors are wondering if this quarter AMZN stock goes and stays over $2000, a price that has become an important resistance level.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 7 Discount Retail Stocks to Buy for a Recession Until its next earnings report on Oct. 24, I expect AMZN to stay range-bound, possibly between $1750 and $1900. In other words, Amazon stock would need to show strong Q3 financial numbers that would act as catalyst to push the stock over $2,000 again. Here is why. Amazon Stock's Unimpressive Q2 EarningsIn July, when Amazon reported earnings for its second fiscal quarter of 2019 , it missed on the bottom line as it warned profits would disappoint in Q3, too. Amazon stock's EPS in the quarter was $5.22, compared to the forecast EPS of $5.56.The retail giant beat analysts' average revenue estimate by a small amount. Its Q2 revenue came at $63.4 billion. Wall Street was looking for $62.5 billion. In Q2 2018, Amazon had posted $52.9 billion in sales.Amazon stock's revenue comes from five main segments: * Retail Products (about 65% of its revenues) * Retail Third-Party Sellers (about 12% of its revenues) * Amazon Web Services, or AWS (about 15% of its revenues) * Subscriptions such as Amazon Prime (about 5% of its revenues) * Other, such as credit card agreements and advertising (about 3% of its revenues)During the quarter, Amazon's U.S. sales increased by 17% to $35.8 billion. The group's international sales grew by 9% to $16.2 billion.Amazon stock's AWS segment is the growth driver operating at high margins. The group especially uses the cash generated from AWS to fund the growth in other segments.Wall Street noted that Subscriptions, which mainly constitute Amazon Prime members, were up 37% to $4.7 billion.Investors noted that the group's renewed investments into the company are paying off as sales increased. However, this sales growth is coming at the expense of lower profit margins.Since the release of the quarterly results, investors have decreased growth expectations for the coming months, as partly reflected by the sharp drop in the AMZN stock price. Wall Street Needs to See Revenue Growth in AMZN StockNot only has Amazon stock changed the world of e-commerce, but the company has been disrupting how consumer shop overall. Yet, these earnings results show that the revenue growth of Amazon's online store, third-party sellers, and subscriptions has been decelerating.Furthermore, AWS, or Amazon's cloud business, reported its slowest growth rate in several years. Its AWS revenue hit $8.4 billion. However, the consensus estimate was for $8.5 billion. In Q2 2018, the unit revenue had been $6.1 billion. Investors were especially concerned that the growth in AWS is not offsetting the top-line declines of other segments.Over the past few years, revenue and operating profits of AWS have grown extremely quickly. However, its mouth-watering operating margins have also attracted serious competition from other tech giants.Microsoft's (NASDAQ:MSFT) Azure, Alphabet's (NASDAQ:GOOG, NASDAQ:GOOGL) Google Cloud, and Alibaba's (NYSE:BABA) cloud operations have become important competitors.Going forward, Amazon expects its investments to increase, another factor that will negatively affect its bottom line and potentially Amazon stock in the near future. The company is expected to invest heavily in its advertising business, Prime Video, international growth, shipping, and logistics.When the company releases Q3 earnings in late October, analysts will be paying attention to the various growth metrics that Amazon reports. Management gave Q3 net sales guidance to be between $66-$70 billion. This guidance would mean a growth of between 17% and 24% compared with third-quarter 2018.To me, earnings results in the past few quarters show that AMZN stock is becoming increasingly dependent on AWS for revenue growth. Therefore, in Q3 I would be interested to see the metrics for each segment. Is It Time to Buy Amazon Stock Now?If you are wondering whether you should buy Amazon stock right now, the answer depends on your evaluation of Amazon's fundamentals and on your investing time horizon.In the coming weeks, I expect AMZN stock to trade in a range between $1,750 and $1,900. If Amazon stock stays above the $1,820 level, it is likely to test $1,900 and above soon.Year-to-date AMZN share price is up over 21%. If you already own AMZN stock, you might want to hold onto your shares. However, within the parameters of your portfolio allocation and risk/return profile, you may consider placing a stop loss about 3%-5% below the current price point, especially if you want to protect your paper profits.AMZN is a is a high beta stock at 1.55. The stock market has a beta of 1.0. Therefore Amazon stock's beta measures its volatility in relation to the market. In other words, in general, AMZN stock rises more than the market in bullish conditions and decreases more when markets are falling. Short-term traders should exercise caution if they want to participate in Amazon stock's wide daily swings.Patient investors who continue to believe in AMZN may see any price dip towards or below the $1,750 level as an opportunity to go long AMZN stock and ride out its daily volatility.Amazon stock will need to stabilize and build a base again before it can deliver a long-term, sustained rally that would take the shares over $2,000. The Bottom Line on AMZN StockWhen Amazon next reports its Q3 results in October, investors will scrutinize the company's fundamentals. If the results show that the company's growth has slowed further, investors may decide that Amazon is now a maturing company. As a result, they may think that the current valuation of Amazon stock is excessive.Nonetheless, it is important to remember that a mega-company with fundamentals as robust as Amazon's could withstand several months of uncertainty. And, eventually, AMZN's management will make decisions that will move the company forward.On Sep. 25, Amazon will be holding its next hardware event. Wall Street would be looking to see what Alexa-enabled products may be introduced in the coming months.Management also continues to invest heavily in original video content development and online streaming services. I'd also continue to observe that space for its potential effect on AMZN stock revenue.In two to three years, I expect AMZN stock investors to be rewarded handsomely. Eventually, fundamental catalysts will drive Amazon stock higher, and the stock price will rise above $2,000 again.As of this writing, the author did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Big IPO Stocks From 2019 to Watch * 7 Discount Retail Stocks to Buy for a Recession * 7 Stocks to Buy Benefiting From Millennial Money The post New Highs for AMZN Stock Will Come After Growth Challenges End appeared first on InvestorPlace.
Alibaba stock has been a big winner since its debut in September 2014. With solid fundamentals and a bullish chart, the case for more upside is a strong one.
Language barriers can hinder international commerce, but that problem is increasingly being solved by machine-based translation programs, which are becoming sophisticated enough to enable people in different countries to communicate as if they spoke the same language. Lily Chen, a sales manager with electronic-forklift company Taixing Jichuan Hydraulic Machinery Co. Ltd. in China, said she’s used Alibaba Group Holding Ltd.’s (BABA) built-in translation tools to communicate with buyers in Europe and the U.S. In an interview with MarketWatch using the technology, she explained that her English was “not very good” when she began as a salesperson and the translation software first helped her conduct professional communications with a customer in Germany and, later, with other buyers.
Multinational Chinese tech company Baidu has taken proactive steps to counter market uncertainty. It has plans to expand into areas of emerging technology.
In breaking news on Wednesday, President Trump announced that he would delay scheduled tariffs against China by two weeks. As he put it, the delay represents a goodwill gesture to China, and comes at the request of China's Vice Premier, Liu He. And on the surface, this development seemingly bodes well for JD.com (NASDAQ:JD) and by extension JD.com stock.Source: Michael Vi / Shutterstock.com After jumping to a strong start earlier this year, JD stock encountered upside resistance around the $31 level. In the beginning of April, shares tried to break past this level, but failed, sparking a downward slide. Later in May, JD.com stock tried to break beyond $31, but the markets again stymied the effort.During the past summer, the e-commerce and technology firm enjoyed some strong sessions. In fact, JD.com stock moved beyond the aforementioned resistance level a few times. Unfortunately, the efforts ultimately went for naught.InvestorPlace - Stock Market News, Stock Advice & Trading TipsIn the one-year chart for JD stock, we can clearly see a consolidation pattern. As InvestorPlace's Tom Taulli noted recently, this pattern is setting shares up for either a breakout or a breakdown. My colleague argues for the former, noting some strong fundamental catalysts. These include a robust and growing Chinese middle class, greater allocation of Chinese GDP to domestic consumption, and an upwardly moving e-commerce market. * 10 Stocks to Sell in Market-Cursed September Significantly, Taulli also mentioned that the trade war could be beneficial for JD stock. That's because the dispute has driven China to focus on its domestic economy, bolstering JD in the process.With this latest gesture from an otherwise strident Trump, it seems the case for JD.com stock breaking out is won. So, should you act on this diplomatic news? JD.com Stock Remains UnconvincingObviously, President Trump extending a small but meaningful olive branch is important. In the nearer term, no one should be surprised to see names like Alibaba Group (NYSE:BABA) and Tencent (OTCMKTS:TCEHY) jump higher.When it comes to China-related developments, the news seemingly kept getting darker for JD stock. With the U.S. and Chinese administration set to discuss their differences, this is the positive narrative that the bulls needed.But the story doesn't end there. Even from early in his administration, President Trump earned a reputation for flip-flopping. Granted, every politician contradicts themselves; otherwise, they wouldn't be politicians. That said, Trump can turn on a dime.Infamously, Trump stated in 2017 that North Korea will be met with "fire and fury" if the hermit nation threatened the U.S. In June of this year, Trump characterized his relationship with North Korean dictator Kim Jong Un as a "great friendship."Therefore, JD.com stock has a credibility problem, but it has nothing to do with the underlying company. Instead, we really don't know what's going to happen next. Of course, uncertainty is something that Wall Street dislikes.I'm not sure what the probabilities are regarding a trade deal in the nearer term. But based on Trump's unpredictable nature, I wouldn't bet too high on a resolution. Remember, Trump must look strong to his voting base because he's losing support elsewhere.Therefore, if a deal doesn't materialize, JD stock risks significant volatility. While many China bulls tout the country's massive middle class, we got to put those numbers into context. With a population size of over 1.4 billion people, on a GDP-per-capita basis, the Chinese are still poor. Plus, initiatives to push into China's lower-ranked cities may not pan out due in part to the country's sizable percentage of agricultural workers. What Happens If We Get a Deal?Suppose though that we do get a deal. Does that optimistic scenario spell game on for JD.com stock?Here again, I remain hesitant. I hate to bring up a politically controversial subject, but questions exist regarding China's economic data. For instance, in June of this year, the Chinese city of Guanghan allegedly falsified its economic data.This scandal brings up an uncomfortable topic: when we say that China's middle class is growing robustly, what data is that based on?Additionally, I'm inclined to believe the negative reports as opposed to the fluff stats. Because if China's middle class is booming, why are their auto sales plummeting? Other metrics are falling too. A trade deal probably won't fix these core problems. * 10 Battered Tech Stocks to Buy Now Therefore, the smart move is likely to wait out JD stock. Sure, the technical pattern is interesting. But with a volatile President and an even more volatile economic situation, gambling here seems more risky than rewarding.As of this writing, Josh Enomoto did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Stocks to Sell in Market-Cursed September * 7 of the Worst IPO Stocks in 2019 * 7 Best Stocks That Crushed It This Earnings Season The post A Tempting Chart and Possible Trade War Truce Won't Save JD.com Stock appeared first on InvestorPlace.
Tapestry, Inc. (NYSE: TPR), the New York-based house of luxury accessories and lifestyle brands, said Thursday it has partnered with with Alibaba Group Holding Ltd - ADR (NYSE: BABA)'s Tmall, a China-focused e-commerce platform. Tapestry said it will be one of the first companies to collaborate with Tmall in adopting the recently unveiled Flagship Store 2.0 beginning later this month. The platform will provide Tapestry's brands with tools to feature customized content and offer shopping experiences for customers.
President Trump delayed China tariff hikes to Oct. 15 in a China trade war "gesture." The ECB cut rates and will restart monetary stimulus. Dow Jones futures and Apple rose.