Vice President Mike Pence, a man who I, until today day, believed to be an octogenarian incapable of signaling highway lane changes and, even less so, use social media, announced on Twitter (TWTR) that President Trump and China have not been seeing eye to eye. Pence said, in a tweet, that “China is meddling in American democracy.” Pence’s tweet goes on to one that “Trump said just last week, we have ‘found that China has been attempting to interfere in our upcoming midterm election.”
Following this tweet, the American market has yet to react on any real measurable scale, but this is subject to change because Monday morning, Shanghai equity markets dropped significantly. As of Monday morning, indexes in Shanghai and Shenzhen, and Hong Kong are down
- Shangahi (SHCOMP) dropped 3.72% to $2716.51 per share, its worse close since Nov. 27, 2014
- Shenzhen (SZSE) dropped 3.83% to $8,060.83 per share
- Hong Kong (HKXCY) dropped 1.49% to $26.78 per share
These decreases follow President Trump’s plans to announce new tariffs, with China immediately reacting by vowing to “retaliate to any new U.S. tariff action, and may decline to participate in further talks if new tariffs are announced,” according to Reuters. All tariffs and resulting reactions between the US and China are all factors playing out in the long-drawn trade war between the two countries.
Fiona Cincotta, a senior market analyst at City Index, gave her take on why Chinese markets reacted the way they did:
“Chinese investors were primarily reacting to a week’s worth of news and they have a lot to digest, including the prospect of a slowing and maturing economy and a bubbling trade dispute with the United States.”
– Fiona Cincotta, Senior Market Analyst, City Index
On Sunday, the People’s Bank of China (PBOC) officially announced a 100 basis points cut to the reserve requirement ratio (RRR) for most banks, resulting in an injection of 750 billion yuan ($109.2 billion) in cash into the banking systems, according to CNBC. The PBOC’s decision to create a neutral monetary policy comes from their abstention of economic stimulation, be positive or negative. The more “accommodative” policy allows for businesses and households to borrow more easily, this lifting the economy. This move comes after “Golden Week,” China’s week-long national day holiday, which saw the closures of Chinese markets for the duration of the holiday.
During this time, CNBC reports that Hong Kong stocks (HKXCY) fell for “four consecutive days as investors grew increasingly concerned that the impact of the trade war is starting to show.”
“China is a bit nervous. There are so many headwinds towards it now and I think it’s right to prepare for the worst and expect the best,” Gareth Nicholson,. Hard of fixed income at Bank of Singapore, told CNBC’s “The Rundown” on Monday.
Financial markets and institutions in China are reacting to tariff threats from President Trump by taking the initiative to protect their economy, while financial analysts in US markets are suggesting that the suggested tariffs are the “bee’s knees.” While the popular opinion is that China is poised to be the next global superpower, CNBC’s Jim Cramer thinks otherwise. He believes that “the president is right” and he thinks tariffs against the Chinese are a smart move, given that the Chinese are “far more of a paper tiger than people realize.” For your viewing pleasure, the term “paper tiger” is used to describe something that seems very scary or frightening, like dads wearing socks with crocks, but is actually ineffectual, like dads wearing socks with Crocs.
There is another school of thought which suggests that the volatility of Chinese markets cannot be used to indicate the strength of the Chinese economy, as a whole, because, according to CNBC, households in China have very little of their own wealth invested in equity markets.
Only time will tell as to whether President Trump enacts these tariffs against China and, if he does, how they will alter the health of the Chinese economy. If the recent drop in major Chinese indexes is any indication of what is to come for Chinese markets, US investors may want to reconsider investing overseas.
Blackberry Stock Price Corrects 23% In A Month, A Value Buy?
There was a time when BlackBerry Limited (BB) used to be one of the leaders of the telecommunication industry by virtue of its smartphones. However, the company’s glory days are well in the past and the stock declined by more than 15% recently after it released its results for Q1 2019. The stock is now trading less than $8 but at the same time, it is important to note that the company has managed to deliver as far as its top-line figures are concerned.
Poor Earnings Lower Blackberry Stock Price
The software and services division is now the company’s most important division. It has emerged as the biggest revenue generator for the Canadian company. Overall sales for Blackberry rose 16% year over year in the latest reported quarter.
However, in the software and services, it was a far more pleasing picture. Its GAAP revenues rose 27% year over year. The company seems to be on the right track in terms of its plan to turn around. But the market doesn’t seem to take a fancy to it. The reasons behind this might have something to do with allegations made by certain parties.
They say that the company uses non-GAAP methods to report earnings. If there is any kind of accounting cloud over a company, growth may be far away.
Where Does This Leave Blackberry Stock Price?
However, Blackberry has been quick to defend itself against these allegations. Financial disclosures of the company are fully SEC compliant. It remains to be seen whether the SEC takes an interest in the matter.
This problem has been the biggest reason behind the underperformance of Blackberry stock price. That’s despite the company’s decent performance. The acquisition of machine learning company Cyclane is also a positive development. But it remains to be seen how it affects Blackberry’s future growth.
Uber Technologies (UBER) Stock Price Hits $45 Mark Again; Are Delivery Stocks Set To Fly?
Uber Technologies (UBER) stock price hit its IPO level of $45 again. Since its IPO, this becomes the fourth time that the company has hit its $45 mark. Each time it has been a real challenge for the company to rise above the IPO price.
Uber has made its name through its market dominance however it’s growth continues to be slow-paced and also has continuous losses, making Uber less attractive to many. However, the thing that Uber has done is bring more attention to the on-demand and delivery stock arena.
Special Delivery: Small-Cap Delivery Stocks Are Gaining Ground In Cannabis
Driven Deliveries Inc. (OTC: DRVD) is one of the only publicly traded cannabis delivery service operating in the United States. Now that’s what we call first-mover advantage. Driven Deliveries provides on-demand marijuana delivery in select cities where allowed by law. The service provides the legal cannabis consumer the ability to purchase and receive their marijuana in a fast and convenient manner.
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Consumers are growing increasingly lazy with most of all purchases from retail to food shopping being done online. And now you can add weed to that list. Driven Deliveries (OTC: DRVD) is quickly gaining steam in legal US markets as the new delivery option for customers is resulting in increased revenue and transactions for dispensaries.
Food delivery apps and services such as GrubHub and Uber Eats have already expanded revenue generated in the food-service industry by 22% or more. Consumers love getting what they want without having to leave their house to get it, plain and simple.
In Spite Of Being A Broken IPO, Still Worth An Investment
Cannabis is just one small niche expanding into the on-demand technology market. Uber has always managed to capture the headlines. This week it did that by launching itself in the sixth German city, Hamburg. The company further has plans to acquire Postmates which gives UberEats a heavy competition provided the price is right.
McDonald’s exclusivity with Uber also came to an end this year with the former getting into a contract with DoorDash. The company is set to report its financial results for Q2 on August 8. Uber had given accounts of its earlier performance through the prospectus issued during the IPO.
UBER stock price has been trading at $40 range since June. But, the figure is likely to change in the coming future for better. Uber has been able to disrupt various markets like those of food delivery, personal mobility, and freight logistics. In Q1 results, the company had reported 93 million monthly active platform consumers.
The revenue of the company has been on a slow rise especially on a net basis. The company sends a major portion of the money received to its drivers to keep them encouraged and active. This is a move that is not going away anytime soon. The deep deficits could also prove to be advantageous for the company.
Even though Uber looks like a broken IPO, it still leads in its industry. The concerns with the valuation persist still for good reasons. Uber continues to ride at a market cap which is five times the current year’s revenue. But, one would have to wait till 2025 to see a positive earning in the growing market.
Stock Price Friday Update – July 19, 2019
ROKU Stock Price Hits Another Life Time High: Good News For Tech Stocks?
In 2019 alone, ROKU stock has risen by as much as 271% as the company continued to add new customers and boosted revenues from advertising. However, could the latest surge be a signal for the next bull market in tech?
3 Biotech Stocks To Watch After Big News This Month
Here is a look at 3 biotechnology stocks that proved to be winners recently.
IPO News: Medallia Goes Public On Friday, July 19
Over 14 million shares of the company will be available to be traded at $16 to $18 per share on NYSE. And of course, investors will be watching MDAL stock price closely. Bank of America Merrill Lynch, Citigroup, and Wells Fargo Securities will oversee the IPO.
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