U.S. Markets Move Down; Tech Stocks Lead Fall
Stocks in the U.S. market moved down led by technology shares. Tech stocks took the heat of treasury yields gained.
The S&P 500 fell in volatile trading, along with the sharp fall in Nasdaq 100. Shares of Zoom Video dropped 12% after an indication of growth slowing.
- Stoxx Europe is down by 0.99%
- Dow Jones is down by 0.10%
- NASDAQ is down by 1.27%
Sales of Xiaomi Slows With Chip Shortages
Chinese tech-major Xiaomi reported a slowdown in quarterly sales after supply chain shortages prevented the normal flow of vital parts. Competition from the other smartphone brands also hurt the company’s revenue. Meanwhile, profits are down 84% YoY after losses in investments as the Chinese economy slowed down.
Cold Weather Threatens Coal Shortage in China
Record coal production for the quarter has not yet ended China’s energy crisis. The threat of extreme cold this winter could cause a dent in supplies again soon according to a consultancy owned by China’s biggest coal ports.
The report says that weather predictions show a drop in temperatures for winter, which will increase the demand for coal to heat homes.
U.S. and Other Nations Plans to Release Oil Reserves to Pull Down Price
In a coordinated effort by major economies around the world, oil-consuming nations including the U.S. and India are releasing huge amounts of oil reserves to cause an artificial demand-supply mismatch. The aim of the move is to bring down oil prices after OPEC+ nations refused to increase production.
The U.S. is releasing 50 million barrels from its Strategic Petroleum Reserve. China, India, Japan, South Korea, and the U.K. will join in the effort.
Alibaba Moves Toward Record Low While Investors Bet on JD.com
Alibaba Group Holding Ltd.’s October rally has given way to a renewed slump that has the stock heading for a record low while technology rival JD.com Inc. is extending its recovery and winning favor with analysts. Deutsche Bank AG’s Leo Chiang cut his target price for Alibaba’s Hong Kong stock by almost 4% on Monday, citing “near-term challenges,” while raising his target for JD.com by 16%, noting “resilient growth amid macro uncertainties.”
One Investor Makes a Quick $582 Million in Evergrande Fire Sale
The buyer of China Evergrande Group’s stake in HengTen Networks Group Ltd. is sitting on a paper profit of $582 million after the shares surged in the wake of the sale. Li Shao Yu agreed on Nov. 17 to buy Evergrande’s 18% stake in the internet services firm for HK$2.13 billion ($273 million) at the discounted price of HK$1.28 a share. The stock has since rallied almost 140% to about HK$4. That values her stake at HK$6.67 billion.
BlackRock Says Time to Buy China Stocks, Trim India Exposure
BlackRock Inc. is trimming its investments in Indian equities and becoming more optimistic on China on attractive valuations amid expectations that policy hurdles will ease next year. “Valuations are key right now,” Belinda Boa, head of active investments for Asia Pacific at the world’s biggest asset manager, said at a briefing. “Because of the outperformance we’ve seen in India this year, on a relative basis, we are starting to take profits” and becoming more positive on Chinese growth stocks, she said.
Zoom Falls 25% on Slower Revenue Growth
Shares of Zoom Video Communications fell 25% on Tuesday after the video conferencing company reported its slowest quarterly revenue growth in the third quarter. Even though the growth is weaker, the revenue was reported at $105 crores, better than expectations. The company is not just having slower customer growth, the employee addition is also not promising. The platform is facing tight competition from rivals including Cisco, Microsoft, and Salesforce.
French Nov Business Activity Accelerates Faster Than Ever
IHS Markit said on Tuesday that its November flash Purchasing Managers Index (PMI) for the French services sector rose to 58.2 points compared to 56.6 points in October. This is great compared to the forecast for 56.0 points. The flash PMI for the French manufacturing sector accelerated to 54.6 points against 53.6 points in October, better than the forecast of 53.0 points.