JD.com Visited By Friday The 13th’s Jason, Week In Review

Week in Review

Despite today’s downdraft, Asian equities were mostly higher for the week, except for Mainland China, which reopened from a weeklong holiday on Monday.
US Senate Majority Leader Chuck Schumer and five senators visited China this week, meeting with President Xi and Foreign Minister Wang. The group released an amended statement following attacks on Israel over the weekend.
There were multiple examples of state-sponsors actors seeking to support stocks and the economy including an expressed willingness to expand this year’s fiscal deficit, the purchase of shares in large banks by an investment group associated with China’s sovereign wealth fund, and the announcement of a state-backed stabilization fund.
LVMH and Japanese retail group Fast Retailing, which owns Uniqlo, both reported better-than-expected China revenue this week.

Friday’s Key News

Friday The 13^th lived up to its unlucky reputation as Asian equity markets were lower on the rising probability of another Fed hike after the US’ hot CPI print, which led the US dollar higher.

Despite today’s downdraft as traders took short term profits following several strong days, Asian equities managed gains for the week other than Mainland China. In addition to the macroeconomic headwinds, JD.com’s meeting with sell side analysts prior to their earnings release was a disaster. After the conference call, analysts cut their price targets for the stock and lowered their Q3 revenue target to ~1% year over year (YoY). JD’s US listing fell -8.27% yesterday in US trading hours though their Hong Kong share class (9618 HK) declined -11.47% as a rumor that the CEO had been arrested added to the downside. Obviously, the rumor is not true as the company denied it. JD’s US listing hit a three-year low while the Hong Kong share class was Hong Kong’s most heavily traded stock at HKD 4.28 billion traded, which is light, though its volume was 40 million shares traded versus yesterday’s 8.7 million. JD.com’s P/E is now 9, which is why I have advocated that companies pay a dividend. If you are being treated like a value stock, do what value stocks do, which is pay a dividend as they have the cash on the books.