Traders seem to think that there are some deals among Chinese internet stocks.
Pinduoduo PDD,
jumped 22% on Tuesday, as the Chinese e-commerce group pledged $ 1.5 billion in future profits to charity, after Tencent made a considerable donation while Chinese President Xi Jinping repressed the business sector.
It was not the only stock in China that increased. JD.com JD,
jumped 14%, after reporting stronger-than-expected revenue and getting an investment from star fund manager Cathie Wood. Tencent Music Entertainment TME,
added 13%.
George Magnus, the former chief economist at UBS and author of Red Flags: Why Xi Jinping’s China is in Danger, admits that traders could have a point in bidding for such shares.
“According to the average reversal criteria, these technology and related stocks are now as cheap as chips,” he tells MarketWatch. But, according to him, they should be only for bargaining and not for a pension or long-term portfolio. “If many of these companies take the political and regulatory heel, in my opinion they should not be listed as growth stocks. The change in valuation should be permanent,” he says.
Magnus wrote an article on Xi’s repression for the London-based SOAS China Institute, in which he said that “everything about Xi’s China suggests a desire for Leninist control and discipline that is not compatible with good economic results.” He agrees that Chinese authorities have reason to deal with inequality, but says that to do so effectively, China will have to do more than repress the super-rich.
“The government should make sure that the tax revenue earned goes directly to other less-favored households, including migrant workers from urban areas without an urban register, and not to government coffers or other projects of little value to the majority. Otherwise, it would not be possible for lower-income households to consume more and save less, and in doing so they will be more mobile geographically and in terms of the job, ”says Magnus.
The boom in the concert economy is even more pronounced in China than in the United States, where informal employment accounts for nearly 60% of jobs. This low and insecure wage situation makes China’s issue of inequality so important, according to him, especially because its social security network is not generous.
The buzz
The People’s Bank of China pledged to stabilize credit supply and increase the amount of money for smaller businesses, and the country’s third largest container port reopened after closing COVID-19 .
The House, led by Democrats, on Tuesday advanced a key measure related to President Joe Biden’s grand spending plans, which spread the centrist rebellion. Biden will meet with top technology executives, including Apple’s AAPL,
Tim Cook, MSFT of Microsoft,
Satya Nadella and AMZN from Amazon,
Andy Jassy, to talk about cybersecurity Wednesday.
In Germany, the Social Democratic Party is polling ahead of the CDU / CSU bloc ahead of the September 26 elections. A measure of German business confidence fell for a second month.
Durable goods orders fell 0.1% in July, in a report close to economists ’expectations.
After closing, business software giant Salesforce.com CRM,
and database software company Snowflake SNOW,
report of results. Retail Urban Outfitters URBN,
on Tuesday afternoon reported stronger-than-expected gains, as did tax preparation software maker Intuit INTU,
Nordstrom JWN,
fell after his last report, while Dick’s Sporting Goods DKS,
shot up in a special dividend payment.
The markets
It seems that a calm has begun before Jackson Hole, with futures in ES00 shares,
NQ00,
constant. The performance of the Treasury TMUBMUSD10Y at 10 years,
dragged up to 1.31%.
Random readings
As the anonymous English artist Banksy manages to avoid detection.
It turns out that cotton bags are not useful for the environment.
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