|Bid||0.00 x 1800|
|Ask||0.00 x 1100|
|Day's Range||53.43 - 54.59|
|52 Week Range||52.37 - 76.72|
|PE Ratio (TTM)||N/A|
|Beta (3Y Monthly)||1.35|
|Expense Ratio (net)||0.62%|
China's latest GDP numbers may have slowed to 6.5% year-over-year in the third quarter, missing expectations of 6.6%, but the Direxion Daily FTSE China Bull 3X ETF (YINN) is up 4.56%. The bulls overtaking the bears was evident in the biggest China ETFs based on total assets--iShares China Large-Cap ETF (NYSEArca: FXI) was up 2.07%, iShares MSCI China ETF (MCHI) rose 1.48% and KraneShares CSI China Internet ETF (KWEB) gained slightly at 0.10% as of 2:45 p.m. ET. Chinese regulators have already sought measures to defuse risks related to shares used as collateral for loans, while the recent declines in the country's stock market have created a good buying opportunity, Liu a member of the politburo of the ruling Communist Party of China, told the People's Daily - the party mouthpiece.
As a result, top Chinese officials from the People's Bank of China issued public statements to help quell the fear in the markets. "The recent stock market volatility is primarily the result of investor expectations and emotions," said the Chairman of the People's Bank of China, Yi Gang. China Securities Regulatory Commission Chairman Liu Shiyu issued a separate statement to help re-instill confidence in the capital markets.
Apple (AAPL) has disclosed that some of its accounts were hacked in China (MCHI) (FXI) with the intention to steal money. In a statement on October 16, Apple apologized to Chinese users for these phishing scams, though the breach affected only some of the users. According to the company, the hackers duped some Apple users and then accessed their mobile-payment services such as Alibaba’s (BABA) Alipay and WeChat, through their Apple ID credentials and stole their cash.
The International Monetary Fund (or IMF) cut its estimates for global growth for this year and for 2019, citing trade tensions between the US and its trading partners. It now estimates the global growth will come in at 3.7% in 2018 as compared to its previous estimate of 3.9%. The “World Economic Outlook” report is published twice a year, in April and October.
The iShares MSCI China ETF (MCHI) , one of the largest US-listed China exchange traded funds, entered Wednesday with a year-to-date decline north of 16%. Data indicate traders are bracing for more declines in the big China ETF. Chinese stocks are struggling this year as the country has been in a trade spat with the U.S. If the current tariff-for-tariff tradeoff between the United States and China resembles a mere scuffle, multinational investment bank J.P. Morgan expects it to escalate into a full-blown trade war.
China cuts reserve requirement ratio for the fourth time to boost infrastructure and combat trade war woes, putting related ETFs in focus.
Memory market investors have been on edge, as they were concerned that the two-year-long memory uptrend is coming to an end. The stock’s bullish price target declined from $120.00 to $110.00, and its bearish price target fell from $60.00 to $45.00. The bullish analysts took this as a positive sign that the supply is disciplined in the memory market.
President Donald Trump has lashed out against existing trade deals, calling them unfair to the United States. NAFTA especially has come under criticism from President Trump.
The US-China (YINN) trade war has been going on for months. After the second round of tariffs on $200 billion worth of Chinese (MCHI) goods came into effect, the markets started to take the trade war seriously. Since the first level effects of the trade war are clear now, investors have started thinking about the trade war’s ripple effect.
The United States and China (MCHI) are engaged in a trade war, with tariffs as the weapon of choice. President Donald Trump imposed a 10.0% tariff on $200.0 billion in Chinese goods, which became effective on September 24.
The Fed has addressed trade disputes on many occasions. In the Fed’s latest policy minutes, the committee sounded concerned about ongoing trade disputes and the possibility of the disputes escalating. According to the meeting minutes, most Fed members “expressed the view that an escalation in international trade disputes was a potentially consequential downside risk for real activity.” The Fed was also concerned about how the uncertainty regarding trade policy led to a reduction and delays in business investment spending while putting pressure on input prices.
Apple (AAPL) expects to face political and regulatory challenges in 2018 due to the US–China trade war and lawsuits with suppliers. In a September 5 letter to Robert Lighthizer, the United States Trade Representative, Apple CEO Tim Cook stated that the proposed tariffs by the United States on Chinese (MCHI) imports would hurt US companies, which are paying tariffs for their products that they exported for processing. Cook stated that the traditional method of calculating trade deficits doesn’t reflect the value China generates for Apple in the form of low production costs.
The developing markets have been whipsawed by a mix of a strong dollar, rising interest rates and trade concerns. The Vanguard FTSE Emerging Markets ETF (VWO) fell 9.3%, iShares Core MSCI Emerging Markets ETF (IEMG) dropped 8.9% and JPMorgan Diversified Return Emerging Markets Equity ETF (JPEM) declined 6.1% so far this year. J.P. Morgan's Nicolas Aguzin argued that if you're a long-term, strategic investor, it's worth looking at emerging market returns, pointing to positive fundamentals but adding that valuations could still fall further due to market sentiment and the perception of trouble, CNBC reports.
As we discussed in the previous article, the United States has gone ahead with a 10% tariff on Chinese products. Only a few days back, the United States proposed trade talks with China. In a tweet, Trump said, “we are under no pressure to make a deal with China, they are under pressure to make a deal with us.
Which Sectors Are Worried about Rising US–China Trade Tensions? The ongoing trade disputes between the United States and China (MCHI) have been widely discussed with respect to their potential impact on world trade and the relationship between the world’s two largest economies. The United States has imposed tariffs on $50.0 billion in Chinese imports, and China has retaliated in kind.
Amid the US-China (MCHI) trade tension, investors should note that bilateral trade between the countries is lopsided—China imports far fewer goods from the United States than it exports. Therefore, China will likely not be able to retaliate dollar-for-dollar to tariffs on $200 billion in Chinese goods. However, it may explore other ways to respond.
The Trump Administration has lowered US corporate tax rates. Lower corporate tax rates and tariffs on imported goods are meant to shore up US manufacturing (IVV). While lower tax rates have helped buoy US equity markets, will it help bring back manufacturing jobs lost to countries like China (MCHI)?
Trade wars have been a major market mover for Chinese equities and if investors can look past the news headlines to zero in on value, China-focused ETFs like the Direxion Daily CSI China Internet Index Bull 2X Shares (CWEB) could be a double-down play as the shift from U.S. equities becomes more apparent heading deeper into the late market cycle. CWEB seeks the daily investment results equal to 200% of the daily performance of the CSI Overseas China Internet Index. The fund is comprised of assets that track the index and other financial instruments providing daily leveraged exposure to the index or ETFs that track the index, which is designed to measure the performance of the investable universe of publicly traded China-based companies whose primary business or businesses are in the Internet and Internet-related sectors.
Alibaba (BABA) recently announced that its cofounder and China’s (MCHI) (FXI) richest man, Jack Ma, would be exiting his position as chair to dedicate more time to education philanthropy through the Jack Ma Foundation. The role will be taken over by the company’s CEO, Daniel Zhang, in September 2019. Ma became not only the face of Chinese e-commerce giant Alibaba but also one of the most charismatic and influential men in the global industry.
The capital markets possibly got an early smoke signal that the current bull run in U.S. equities might be stopping for air as the latest consumer price index numbers showed inflation rose at a slower pace than expected. During this bull run that has seen a heavy emphasis on growth-oriented plays, U.S. equities have been the default maneuver, but that may change with a steady shift to value, which could benefit China and emerging markets. While the stock market has been largely tepid this week, the major indexes returned to their upward trajectory as the Dow, Nasdaq Composite and S&P 500 all saw gains in today's trading session, helped, in part, by renewed trade talks between the U.S. and China.
President Trump is planning massive tariffs on goods imported from China (MCHI) (FXI). Recently, Trump has proposed about $200 billion in tariffs on Chinese goods and is planning for yet another $267 billion in tariffs on goods from China. The ongoing trade war is expected to hurt the technology sector at large as a lot of companies import parts and goods from the country, which might become expensive now due to tariffs imposed on them.
Apple (AAPL) recently disclosed its concerns about President Trump’s proposed tariffs on $200 billion worth of Chinese goods. The company told US trade officials in a letter on September 7 that the trade war would raise the cost of a wide range of Apple products including the Apple Watch, AirPods, Apple Pencil, HomePod, as well as adapters and chargers for a host of items. The increase in the cost of Apple products could thus hurt consumers as well, as they may have to pay more for already expensive Apple products.
China’s (MCHI) (FXI) Huawei recently launched its smart speaker, the AI Cube, at the IFA consumer electronics trade show in Berlin, Germany. The launch makes Huawei the first Chinese technology giant to enter the smart speaker market. Huawei’s AI Cube looks similar to Alphabet’s (GOOGL) Google Home product and uses Amazon’s (AMZN) Alexa voice assistant since it doesn’t have its own voice assistant technology.
Import tariffs on a further $200 billion worth of imports from China would mark a major escalation in trade conflicts. China has announced that it will retaliate on about $60 billion worth of US imports. Until now, the markets have mostly shrugged off trade tensions, considering them temporary and a negotiating tactic used by President Trump.
It seems that Alphabet’s (GOOGL) self-driving car division, Waymo, is looking to expand in China (MCHI) (FXI) through a variety of projects. Recently, Waymo started a new car unit, Huimo Business Consulting, in Shanghai, China, pouring in 3.5 million yuan as capital in May. China has stringent rules for foreign companies and doesn’t allow them to operate smoothly in the country.