|Bid||0.00 x 1100|
|Ask||0.00 x 3200|
|Day's Range||40.65 - 41.10|
|52 Week Range||37.85 - 54.00|
|PE Ratio (TTM)||N/A|
|Beta (3Y Monthly)||1.34|
|Expense Ratio (net)||0.74%|
This week, two key events will unfold that could have broad macroeconomic consequences. On December 18, Chinese President Xi Jinping will give a speech as China marks the 40th anniversary of China’s opening up its economy. The speech will likely receive a significant amount of attention amid the US-China trade spat and a softening Chinese economy.
The contradictory statements from White House officials, Trump’s tweets, and the arrest of the Huawei CFO in Canada dimmed the outlook for a permanent trade deal between the US and China (FXI). Equity markets also took cues from the bond market, which portended a slowdown ahead.
The broader market sell-off is intensifying as US-China trade uncertainties and concerns over the slowing global economy are badly hurting investors’ sentiments. However, some stocks are still giving investors a reason to celebrate.
In the last few weeks, many brokerage firms have cut Apple’s (AAPL) target price. Last month, Goldman Sachs (GS) slashed Apple’s 12-month target price from $209 to $182. Goldman Sachs cut the target price due to lower-than-expected demand for the iPhone XR and slowing demand for Apple products in China (FXI). On December 4, analysts at HSBC downgraded Apple’s rating to a “hold” from a “buy.” HSBC thinks that Apple’s hardware growth will be stagnant.
Apple (AAPL) is continuing to lose investors’ confidence in the fourth quarter. Apple stock has already fallen 24.3% sequentially as of December 13. Apple investors (XLK) are concerned about weak new iPhone sales and tariffs in the fourth quarter. On December 14 at 10:10 AM EST, Apple stock fell 2.2% from the previous session’s closing price.
Ericsson (ERIC) claims that the global 5G market is experiencing strong momentum. According to Ericsson’s Mobility Report, “In the United States, one of the major communications service providers launched a 5G home internet service at the beginning of October, and all four of the country’s major service providers have publicly announced that they will begin providing 5G services between late 2018 and mid-2019.”
Some of the recent data points from China including retail sales (WMT) (AMZN), industrial production (BA), and automotive sales have spooked markets. The country’s trade data was also dismal, as it showed both exports and imports growth slowing to multi-month lows. Soft Chinese exports reflect a slowing global economy, while lower imports are associated with moderating demand in China.
Vehicle electrification has been the emerging theme in metal markets. Last year, during its annual investor update, Glencore, the mining and trading giant, spent a considerable amount of time discussing vehicle electrification and how the company’s product portfolio is placed to capture the opportunity. Vehicle electrification is certainly for real.
China’s (FXI) National Bureau of Statistics reported industrial output and retail sales growth data for November on December 14, 2018. Both of these data points came in below the market’s expectations. The industrial output grew by 5.4% YoY, which is its slowest pace in almost three years.
On December 13, China released several economic data points for November. The National Bureau of Statistics said in the note accompanying the data release that the “national economy maintained stable and sound momentum of development in November.” However, markets weren’t impressed with the data. Let’s see why the data points spooked the markets (SPY).
Fitbit Has Continued to Struggle in 2018: What's Next? Fitbit (FIT) seems to be focusing more on the smartwatch segment with the launch of the Versa and Fitbit Ace for kids. According to market research firm Gartner, the wearable device is set to grow by 26% this year driven by smartwatch sales.
Will Ericsson Stock Continue Its Stellar Run in 2019? According to IHS Markit, China’s (FXI) Huawei led the global mobile infrastructure market at the end of 2017 with a share of 28%, up from 25% in 2016. Huawei was, in fact, the only major player to gain market share.
China (FXI) is the world’s largest steel consumer. The real estate and automotive sectors are the two largest steel end consumers in China. China’s property market has been in a state of decline for the past few months.
According to market research firm IDC, Fitbit (FIT) occupied the third position in the global wearable market. Fitbit reportedly shipped 3.5 million units in the third quarter, a fall of 3.1% compared to shipments of 3.6 million units in the same period last year. Fitbit’s shipments fell YoY in a market that is experiencing robust growth. The global wearable market rose 21.7% YoY to 32 million units in the third quarter of 2018.
The United States (QQQ) wants China (FXI) to lower its trade deficit with the United States, address intellectual property theft cases, and stop its industrial subsidy, especially under the Made in China 2025 program.
According to Trading Economics, the country’s GDP growth averaged an impressive 9.6% between 1989 and 2017. China’s GDP growth rate hasn’t suddenly decelerated—it has gradually tapered down. Given China’s current GDP size, no one expects the country to grow in the double digits like it did a decade ago.
As reported by Bloomberg, Citigroup economists think that the damage to the Chinese economy is already done. In the 2019 economic outlook report, Citigroup economists, led by Liu Li-Gang, gave several reasons for the argument. The economists estimate that the ongoing trade war could cut China’s export growth by almost half in 2019, which would put ~4.4 million jobs at risk.
China’s (FXI) steel production hit another record in October, coming in at 82.6 million tons and marking the third consecutive month of gains for the country. While China (MCHI) produced record steel on a monthly basis, the average daily output in October was lower than in September, according to Reuters’ calculations. China’s production for the first ten months of the year totaled 782.5 million tons, a rise of 6.4% over the same period last year.
ECB Policy Statement Today, Watch Italian Bond Markets The European Central Bank is widely expected today to announce that it will indeed stop the Euro printing presses by the end of the year, which is the end of the month, which is a mere two weeks away, though the “end of QE” in the Eurozone […] The post Market Morning: ECB QE Ending, Trump Plays Good Cop in Huawei Arrest, Hemp Soon Legal? appeared first on Market Exclusive.
China’s (FXI) domestic demand is on a downtrend, as is evident from the latest batch of Chinese trade data, which showed weaker-than-expected exports and imports for November. China’s auto sales data were released on December 11. With just one month left in 2018, it’s highly likely China will report its first yearly decline in automobile sales since 1990.
Has President Trump Lost His Mojo to Lift Markets? President Trump’s tweets have impacted markets’ price action in 2018. Lately, markets (QQQ) have reacted sharply to some of President Trump’s tweets. Stocks fell sharply after President Trump’s “tariff man” tweet.
One of the major factors spooking the markets worldwide has been the concern about China’s economic slowdown. According to Bank of America Merrill Lynch’s survey for November, apart from trade war risk and concerns about quantitative tightening, China’s slowdown was fund managers’ biggest worry. As the trade war escalates, concerns about China’s slowdown are also picking up.
On December 1, US (SPY) President Trump and Chinese (MCHI) (FXI) President Jinping discussed some issues during the G20 summit in Argentina. They discussed China’s trade practices, which have led to massive tariffs on $200 billion worth of imported goods from China. President Trump stated that he temporarily won’t increase the tariff on imported Chinese goods worth $200 billion. Previously, he decided to increase the tariff to 25% from 10% starting on January 1.
Apparently, President Trump isn’t happy with how the markets have reacted to the trade war truce. Concerns about China’s slowdown look more real with almost every new data point. Over the weekend, China released its November trade data.
In the previous articles, we discussed China’s steel and aluminum exports. While China (FXI) accounts for the bulk of global steel and aluminum capacity, it lacks in copper deposits and is the largest copper importer. China imported 423,000 metric tons of unwrought copper last month, a YoY fall of 3.0%.