|Bid||40.80 x 1000|
|Ask||40.84 x 900|
|Day's Range||41.19 - 41.60|
|52 Week Range||37.85 - 54.00|
|PE Ratio (TTM)||N/A|
|Beta (3Y Monthly)||1.32|
|Expense Ratio (net)||0.74%|
In an effort to restore its economic relationship with the U.S., China offered to ramp imports from the region by more than $1 trillion over the next six years, according to a Friday Bloomberg report. The rate would slowly reduce its trade surplus and completely eliminate the imbalance by 2024. The conciliatory offer, if true, is meant to appease U.S. officials aggravated by what they perceive to be an unfair trade arrangement.
Apple Updates: Verizon Deal, HomePod in China, and More(Continued from Prior Part)Apple launches three iPhone models Apple (AAPL) is reportedly releasing three iPhones this year. According to the Wall Street Journal, Apple’s three new models will
Apple Updates: Verizon Deal, HomePod in China, and More(Continued from Prior Part)Apple’s HomePod enters ChinaApple (AAPL) recently announced that it is debuting its smart speaker HomePod in China (FXI). Apple’s smart speaker will be available
Apple Updates: Verizon Deal, HomePod in China, and More(Continued from Prior Part)Apple freezes its hiring plan Apple (AAPL) has recently announced that it is cutting back on its hiring plan amid weakness in iPhone sales, as was pointed out by CEO
January BAML Survey: Fund Managers Bearish, but No Recession Yet(Continued from Prior Part)Trade war still investors’ top concernIn Bank of America Merrill Lynch’s January 2019 survey, trade war concerns remained the top tail risk cited by
What Q4 Semiconductor Earnings May Have in Store for Investors(Continued from Prior Part)Texas Instruments’ broad customer base Previously, we saw that TSMC is set to report strong revenue in the fourth quarter of 2018, but its first-quarter 2019
Asian markets were among the worst off in 2018 as trade tensions, U.S. interest rate hikes and China’s deleveraging policies sent investors running. However, now that the dust is settling, investors may ...
Stocks Mixed As Everyone Confused About China With nothing compellingly good or bad out about China today, US stock market indexes are mixed. The Dow is down after being up earlier, the S&P is flat, and the Nasdaq is slightly higher as of the early morning. China is reportedly cutting taxes and increasing spending, which […] The post Market Morning: China Buys Oil, Aurora Buys Whistler, Shutdown Hurts Airlines, Brexit Disaster Unfolding appeared first on Market Exclusive.
Could Auto Executives Make President Trump End the Trade War?The auto industryLast week, the S&P 500 Index (SPY), NASDAQ Composite Index, and Dow Jones inched up 2.5%, 3.5%, and 2.4%, respectively. The broader market started the third week of
China’s Trade Surplus Surges Higher under Trump’s Watch(Continued from Prior Part)ChinaChina (FXI) exported 5.56 million metric tons of steel in December, a yearly fall of 1.9%. However, exports rose 4.5% on a month-over-month basis. China’s
Why Autohome Is Down 13% TodayAutohome Chinese online automobile content provider Autohome’s (ATHM) stock is known to be highly volatile. In December, the stock fell 5% after surging 13.8% in the previous month. Nonetheless, it managed to end 2018 with solid 24.7% gains. Investors’ high expectations for the company’s growth potential due
Jim Cramer Suggests Nervous Investors Buy Gold Now ## Cramer suggests adding gold Mad Money host Jim Cramer is advising investors to invest in gold (IAU) if they’re concerned about the Fed’s interest rate policy and the trade conflict between the US (SPY) (IVV) and China (FXI). Cramer said, “If you’re looking for an insurance policy against volatility and economic uncertainty, gold is a great way to go.” He added, “While I like the stock market here, as you know, now that the Fed has decided to be more patient, the whole point of diversification is to be prepared in case something goes wrong … and your thesis doesn’t pan out.” Read Bulls versus Bears on Wall Street: Time to Buy Gold in 2019? for major analysts’ take on the gold price outlook in 2019. ## What should investors buy? However, Cramer doesn’t recommend buying the actual metal. Instead, he recommends direct exposure through the SPDR Gold Shares (GLD), which is the largest gold-backed ETF. He thinks that GLD and other gold mining ETFs (GDX) (NUGT) reduce risk and inconvenience. In addition to GLD, Cramer also recommends a high-quality gold producer like Barrick Gold (GOLD). Recently, Barrick Gold and Randgold Resources’ merger was finalized, which canceled Randgold’s London listing. ## Barrick-Randgold merger created a mining behemoth Regarding the Barrick Gold and Randgold Resources merger, Cramer likes the merged company. He said, “The company has the lowest total cash costs among its peers — I like that — [and] it has a nicely diversified portfolio of assets across the world — I love that.” Read Is Barrick Worth a Look after Its Merger with Randgold? for more details on the new company’s operating metrics and its outlook after the merger.
Copper's Diagnosis: How Severe Is China’s Slowdown? ## China’s slowdown China’s slowdown appears to be the biggest challenge for global markets. The country’s slowdown has been amplified by the trade war with the US (SPY). Several indicators, including automotive sales, have pointed to a deeper slowdown in the world’s second-largest economy. What do China’s copper imports tell us about its economy? China (FXI) doesn’t have enough copper reserves. However, China is the largest copper importer. The country’s copper imports are seen as a leading indicator of its copper demand and economic activity. ## Imports fell In December, China imported 429,000 metric tons of unwrought copper. The imports fell 4.7% YoY (year-over-year) and were also lower on a sequential basis. China’s unwrought copper imports have fallen on a yearly basis for two consecutive months. China’s copper ore and concentrate imports fell to 1.46 million metric tons in December from 1.7 million tons in November. The imports also fell 11.5% YoY. In December, the imports were at the lowest level since February. ## Analysis The fiscal 2018 picture looks strong. Unwrought copper and copper ore imports rose on a yearly basis. However, what we’ve seen over the last few months is a slowdown in China’s copper imports. So far, leading copper miners including Freeport-McMoRan (FCX) have maintained that the underlying demand from China has been strong. However, falling Chinese copper imports might persuade copper miners to tone down their expectations for China’s copper demand (BABA). Apple (AAPL) also lowered its revenue forecast due to the slowdown in China’s sales. Read Why China Might Need a New Economic Model Now for more analysis of China’s slowdown.
China’s central bank, the People’s Bank of China (or PBoC), announced on January 4, 2019, that it will cut the reserve requirement ratio (or RRR) of Chinese (FXI) banks by 50 basis points on January 15 and a further 50 basis points on January 25. To stimulate demand in the slowing economy, China’s central bank cut the RRR four times in 2019. Prior to the central bank’s decision to cut the RRR, China’s premier Li Keqiang has urged the central bank to cut the reserve requirements.
Concerns about China’s economy have been a major risk for global markets. Last week, Apple (AAPL) lowered its revenue forecast due to the slowdown in China. The economy grew at an annualized pace of 6.5% in the third quarter, which is the slowest expansion rate since 2009. On January 11, Reuters reported that “China plans to set a lower economic growth target of 6-6.5 percent in 2019.” Lower economic growth isn’t really a surprise.
While the markets have remained in the green for the last few days, they are getting spooked on renewed China slowdown fears. The latest data out of China (FXI) that’s fueling these fears is inflation data.
Steel Companies’ 2019 Outlook: Can the Winning Streak Continue? (Continued from Prior Part) ## China’s slowdown China is the world’s largest steel producer, consumer, as well as exporter. Over the last few months, we’ve seen a flurry of soft economic data from China (FXI). From the perspective of steel companies (MT), the slowdown has been quite significant in the real estate and automotive sectors, which happen to be the two largest steel end consumers. ## Stimulus While China has been talking about monetary and fiscal policy initiatives to lift its economy, it has shied away from stimulus for the housing and automotive sectors. As for the housing sector, it seems quite unlikely that China would look at a specific package, as the country has been trying to address property speculation. However, a relief package for the automotive sector might still be expected. In 2015 also, China had lowered its purchase tax on cars to provide a boost to sagging vehicle sales. The purchase tax was gradually increased and was restored at the original level of 10% last year. ## Demand As Chinese steel demand has faltered, Chinese steel prices have come under pressure. Falling Chinese steel prices have had a domino effect on global as well as US steel prices. Now, while China’s slowdown is a known factor, the steps taken by China to bolster its economy could drive steel prices this year. Investors in US steel and iron ore companies like U.S. Steel (X), AK Steel (AKS), and Cleveland-Cliffs (CLF) should closely follow the policy steps taken by the Chinese government including its supply-side reforms. Meanwhile, even with the known headwinds, US steel stocks might look attractive from a valuation standpoint. We’ll discuss this more in the next and final article. Continue to Next Part Browse this series on Market Realist: * Part 1 - Steel Companies’ 2019 Outlook: Can the Winning Streak Continue? * Part 2 - Are We Seeing a Typical Dead Cat Bounce from Steel Stocks? * Part 3 - What Should US Steel Investors Watch Out for in 2019?
US-China Trade Talks Ended on January 9: Is There Optimism? (Continued from Prior Part) ## United States The US and China (FXI) finished the trade talks on January 9. According to the US statement, the talks focused on structural reforms like intellectual property rights. The US statement said, “The talks also focused on China’s pledge to purchase a substantial amount of agricultural, energy, manufactured goods, and other products and services from the United States.” Last month, China reportedly started buying US soybeans. The purchases had been halted amid the escalating trade war. Last year, China agreed to purchase more goods from the US (AAPL) in a bid to lower the deficit. Since President Trump wanted more concessions and specifics, the trade war truce didn’t hold ground after a few days. ## Economy However, the current situation is slightly different compared to last year. In 2018, the US economy (QQQ) was looking remarkably strong due to the tax cut wave. However, the economic growth is expected to slow down in 2019. Also, there’s the presidential election in 2020. In the United States, the opposition has been brewing against the tariffs. Some observers blamed the trade war for the market sell-off last year. With the electoral race heating up, President Trump might not want to antagonize the markets. ## What to expect? Alibaba’s (BABA) Jack Ma said that the trade war could last for decades. We could see China purchase more agricultural and energy products from the US in the immediate term. There could also be some small concessions on structural issues. However, China probably won’t change its behavior quickly. The trade war could be a long-term affair when it comes to structural reforms in China (BIDU). As Commerce Secretary Wilbur Ross told CNBC, “I think there’s a very good chance that we will get a reasonable settlement that China can live with, that we can live with and that addresses all of the key issues. And to me those are immediate trade. That’s probably the easiest one to solve” Next, we’ll discuss whether resolving the trade war with the US could open Pandora’s box for China. Continue to Next Part Browse this series on Market Realist: * Part 1 - US-China Trade Talks Ended on January 9: Is There Optimism? * Part 3 - China: Resolving the Trade War Could Open Pandora’s Box
Jeffrey Gundlach expects 2019 to continue to be a volatile year. Gundlach believes that higher yields on bonds (HYG) (BND) will hurt stocks in what he’s called a “tug of war,” as reported by CNBC. Gundlach believes that due to buybacks, the equity markets have turned into a collateralized debt obligation residual, which he believes is “getting thinner and thinner, riskier and riskier.” He added, “So, the balance sheets of corporations are balanced on ever-dwindling equities as they buy back shares and increase their leverage ratios.
Qualcomm Stock Could See Significant Movement on Court Rulings ## Qualcomm’s trial with the FTC begins Qualcomm (QCOM) has been inundated with antitrust lawsuits from Apple (AAPL) and several countries’ regulators. The chip supplier has paid fines to regulators in Europe, Taiwan, and South Korea related to antitrust issues, but it has appealed these fines. It even lost modem orders for Apple’s iPhones, which sent its stock down 27% between October and December 2018. However, Qualcomm stock picked up from December 24 onward after it secured sales bans on Apple’s older iPhone models in China (FXI) and Germany (EWG) for infringing its patents. This year will be an important one for Qualcomm, as its trial against the FTC (Federal Trade Commission) is set to begin. In 2017, the FTC alleged Qualcomm of misusing its monopoly in the mobile chip market to force phone manufacturers to license its patents. The FTC also stated that the company had violated its fair, reasonable, and nondiscriminatory terms by refusing to license its SEPs (standard essential patent) to competitors. The FTC accused Qualcomm of having exclusive arrangements with Apple that prevented competitors from selling their chips to the iPhone maker. A ten-day no-jury trial between Qualcomm and the FTC started in a San Jose court on January 4 after settlement talks between the two failed. Investors should watch for the court ruling, as it could have significant implications for Qualcomm’s business model and the smartphone industry as a whole. ## What if the court rules against Qualcomm? If the court rules against Qualcomm, the latter will be forced to license its SEPs to competitors, which would affect its monopolistic position in the smartphone chipset market. Qualcomm could also be forced to change its licensing model and charge royalties on the selling price of the modem instead of the selling price of the entire device. Such a ruling would significantly impact Qualcomm’s earnings, as it earns more than 80% of its profits from its licensing business. Apple will be closely watching the court’s ruling, as it has filed a similar lawsuit against Qualcomm in which it’s asking the chip supplier to charge royalties on its modem price, not its device price. Next, we’ll consider a scenario in which the court rules in Qualcomm’s favor. Continue to Next Part Browse this series on Market Realist: * Part 2 - Impact of US FTC-Qualcomm Court Ruling on the Smartphone Industry * Part 3 - How Strong Are QCOM’s Arguments against the FTC’s Allegations?
Are Analysts Turning Bearish on Gaming Stocks? ## Gaming stocks Yesterday, SunTrust Robinson lowered Electronic Arts’ (EA) target price from $116 to $105. The brokerage also lowered Activision Blizzard’s (ATVI) target price from $65 to $62. Activision Blizzard has received a “strong buy” rating from eight analysts, while 13 analysts have a “buy” rating on the stock. The remaining eight analysts polled by Thomson Reuters have rated the stock as a “hold” or some equivalent. Activision Blizzard has a mean consensus price target of $70.69, which represents a 39% upside over its January 9 closing prices. Electronic Arts is trading 35% below its mean consensus price target. ## Latest news Activision Blizzard has been in the news over the last couple of days. Yesterday, the company announced some new appointments at the leadership level. According to Reuters, Blizzard Entertainment and NetEase have extended their partnership in Mainland China. Their 11-year-old partnership has been extended by another four years. Earlier this year, Netflix (NFLX) hired ATVI’s ex-CFO Spencer Neumann. ## China China’s (FXI) gaming industry has taken a hit after the country blocked new game approvals. However, in December 2018, China granted some new approvals. The country granted 84 new video games approvals yesterday. According to Reuters, the list doesn’t have any games from Tencent Holdings (TCEHY), the largest gaming company in China. NetEase also doesn’t have any games on the new approval list.
Alberto Gallo, portfolio manager at Algebris Investments, said it would be hard for China to maintain any agreement "beyond a level of promise" it makes on intellectual property and opening its markets. On the other hand, China can agree to certain financial stability measures, including how it manages the yuan. Is Chinese Car Sales Data A Notable Datapoint? For the first time in more than two decades, car sales in China fell and this has some wondering if it's related to the ongoing trade dispute with the U.S.
On Jan 4, People's Bank of China (PBOC), cut the reserve requirement ratio (RRR) by 100 bps or 1 percentage point to reignite growth in the world's second-largest economy.
Emerging markets stocks and exchange-traded funds (ETFs) struggled through a miserable 2018 as the MSCI Emerging Markets Index lost more than 15% on the year. Chinese ETFs were among the most egregious offenders. Last year, the iShares China Large Cap ETF (NYSEARCA:FXI) and the iShares MSCI China ETF (NASDAQ:MCHI), two of the largest Chinese ETFs trading in the U.S., lost 13.3% and 19.8%, respectively. Still, there are hopes that moves by the Chinese central bank coupled with the potential for headway on the U.S.-China trade spat could spur Chinese ETFs over the near-term. "From a stock market perspective, with a lot of negative news already priced in, we could realistically hope that the absence of further negatives may at least lead to some stabilisation in equity prices," Colin Morton, a portfolio manager at Franklin Templeton Investments, told the Financial Times. InvestorPlace - Stock Market News, Stock Advice & Trading Tips Currently, trade teams from the U.S. and China are meeting in Beijing and there is optimism those talks could result in a credible trade truce, which could spark a rally in Chinese ETFs. "A potential deal would likely involve a sharp increase in Chinese purchases of American soybeans and liquefied natural gas," reports the Washington Post. * 10 Oversold Stocks Due for a Bounce However, if trade talks falter, the following Chinese ETFs merit caution over the near-term. ### Invesco China Technology ETF (CQQQ) Expense Ratio: 0.70% per year, or $70 annually per $10,000 invested Funds focusing on China's fast-growing internet and technology sectors overshot the 2018 losses of traditional Chinese ETFs significantly. Just look at the Invesco China Technology ETF (NYSEARCA:CQQQ), which tumbled more than 35% last year. CQQQ, which tracks the AlphaShares China Technology Index, is indeed a tempting bet for investors looking to buy the dip in Chinese ETFs. Prior instances of Chinese internet stocks outperforming their U.S. counterparts only add to the allure of CQQQ and rival Chinese internet funds. Home to 74 stocks, CQQQ features exposure to just three sectors: communication services, consumer discretionary and technology. In other words, this Chinese ETF is a growth fund and investors need to renew their enthusiasm for growth fare, U.S. and Chinese stocks alike, before CQQQ can rebound from its 2018 doldrums. ### Invesco China Small Cap ETF (HAO) Expense Ratio: 0.75% In the U.S., small-cap stocks were stars through the first three quarters of 2018, but ex-U.S. small caps scuffled for most of the year. Later in the year, domestic small caps faltered before large-cap fare, pressuring international rivals along the way. Over the past 90 days, the Invesco China Small Cap ETF (NYSEARCA:HAO) has performed less poorly than the U.S.-focused Russell 2000 Index. However, investors should not be deceived by that point, Over the past year, HAO is lower by 26.4% while the Russell 2000 is lower by less than 10%. * 7 Small-Cap Stocks With Big Growth Potential In 2019 While China is far from entering a recession, economic growth there is slowing a bit and that scenario is likely to strain smaller stocks more than large-cap names. That could make betting on HAO and other small-cap Chinese ETFs difficult given the elevated volatility that comes with international small caps. Over the past three years, HAO's annualized volatility is about 400 basis points higher than the Russell 2000's. ### Global X MSCI China Consumer Discretionary ETF (CHIQ) Expense Ratio: 0.65% There is undoubtedly a compelling long-term case for tapping the Chinese consumer, a theme that's accessible via Chinese ETFs such as the Global X MSCI China Consumer Discretionary ETF (NYSEARCA:CHIQ). As is the case in the U.S., consumer discretionary stocks are cyclical in China and likely to overshoot broader market losses when stocks decline. That was the case for CHIQ in 2018 as this Chinese ETF tumbled 28.7%. This Chinese ETF is heavily dependent on internet stocks, a corner of the Chinese equity market that was savagely repudiated last year. For example, Alibaba (NYSE:BABA) and JD.com Inc. (NASDAQ:JD) combine for about 15.8% of CHIQ's weight. Some recent data points outline the near-term risks associated with consumer-oriented Chinese ETFs. "A decrease in Chinese car sales is one key data point that has been misconstrued, China experts say," reports NBC News. "Automotive consulting firm ZoZoGo found that car sales in China reversed course last year and fell by 3 percent after roughly two decades of growth, and the country's largest automotive trade group also has reported sinking sales figures in recent months." ### Reality Shares Nasdaq NexGen Economy China ETF (BCNA) Expense Ratio: 0.78% The Reality Shares Nasdaq NexGen Economy China ETF (NASDAQ:BCNA) is one of the newer members of the Chinese ETFs fray, having debuted in June 2018. BCNA targets the Reality Shares Nasdaq Blockchain China Index, which is "designed to measure the returns of companies in China that are committing material resources to developing, researching, supporting, innovating or utilizing blockchain technology for their use or for use by others," according to Reality Shares. While blockchain has myriad applications throughout the technology universe and other industries, investors still often associate blockchain as being intimately linked to the crypto currency space. That is a plus for Chinese ETF like BCNA when cryptocurrencies are rallying, but the opposite was true last year when bitcoin lost 80% of its value. * The 7 Best Stocks in the Entrepreneur Index As a result of weakness in the cryptocurrency market, BCNA is off to an inauspicious start, having shed more than 13% since inception. ### Franklin FTSE China ETF (FLCH) Expense Ratio: 0.19% With its annual fee of just 0.19%, the Franklin FTSE China ETF (NYSEARCA:FLCH) is one of the cheapest Chinese ETFs on the market. While investors love a good deal on ETF fees, cheap ETFs rise and fall, just like their high-fee counterparts. FLCH proves as much. Low fee or not, this Chinese ETF is down more than 22% over the past year. This fund is a broad market play on China that holds 274 stocks with a weighted average market capitalization of $157.8 billion. FLCH allocates about 52% of its combined weight to communication services and financial services stocks, while the consumer discretionary and industrial sectors combine for almost 26% of the fund's weight. Reflecting the state of affairs with Chinese stocks, FLCH has a low price-to-earnings ratio of just 10.86, but neither that trait nor its low fee insulate this fund from further declines in Chinese stocks. ### Invesco Golden Dragon China ETF (PGJ) Expense Ratio: 0.70% The Invesco Golden Dragon China ETF (NASDAQ:PGJ) is one of the oldest Chinese ETFs in the U.S., having recently celebrated its 15th birthday. Relative to other broad market Chinese ETFs, PGJ has a small lineup of just 64 stocks. A small number of stocks in an ETF can expose investors to concentration risk at the sector and individual holdings levels. That is a consideration with this Chinese ETF as just two sectors -- communication services and consumer discretionary -- combine for over 83% of PGJ's weight. Plus, the fund's top three holdings combine for over a quarter of its weight. * 10 Stocks to Pull From the Bear Market Bargain Bin PGJ needs those sectors to rebound because when those groups falter, this Chinese ETF suffers as highlighted by a 2018 decline of 29.5%. ### SPDR S&P China ETF (GXC) Expense Ratio: 0.59% The SPDR S&P China ETF (NYSEARCA:GXC) is a basic broad market Chinese ETF that has one of the largest rosters -- nearly 360 stocks -- among the Chinese ETFs highlighted here. GXC components are "publicly listed companies with a float-adjusted market cap of $100M and at least $50M in annual trading volume are included in the Index," according to State Street. As is the case with the aforementioned PGJ, there are elements of concentration risk with GXC. The ETF's top two holdings -- Tencent Holdings Ltd. (OTCMKTS:TCEHY) and Alibaba -- combine for over a quarter of the fund's weight. Three sectors -- communication services, financial services and consumer cyclicals -- combine for two-thirds of GXC's roster, indicating a lot needs to go right for this Chinese ETF to rebound from its 2018 loss of 19.4%. As of this writing, Todd Shriber did not hold a position in any of the aforementioned securities. ### More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Stocks to Buy Down 20% in December * 5 Chinese Stocks to Avoid Now (But Buy Later) * 3 Big Gainers That Easily Could Be the Best Stocks to Buy Compare Brokers The post 7 High-Risk Chinese ETFs to Avoid … For Now appeared first on InvestorPlace.