Mitrade Insights is dedicated to providing investors with rich, timely and most valuable financial information to help investors grasp the market situation and find timely trading opportunities.

2021

Best News & Analysis Provider

FxDailyInfo

2022

Best Forex Educational Resources Global

International Business Magazine

Insights

News

Why Chinese Stocks Were Slipping Late This Week After Monster Price Rises

Source The Motley Fool

The Great Chinese Stock Rally of 2024 seemed as if it had run its course by Thursday afternoon. Nevertheless, the big pops in prices of equities across that economy still left them in positive territory when compared to their levels at last Friday's market close.

Investors piled into every conceivable sector, so we could have thrown a dart at a board full of U.S.-listed Chinese titles and hit all winners. According to data compiled by S&P Global Market Intelligence, Bilibili (NASDAQ: BILI) was up by 18% week to date as of Thursday night. Tencent Music Entertainment Group (NYSE: TME) and Studio City International Holdings (NYSE: MSC) rose respectively by 10% and 11.6%. Crushing them all was Up Fintech Holding (NASDAQ: TIGR), which surged more than 100% higher.

What comes up must come down

The origin of the rally was the Chinese government's unveiling of its latest economic stimulus package, aimed at getting the massive yet lumbering economy on a more pronounced growth trajectory. At the same time, the authorities signaled hope for improvement in sluggish and frequently controversial corners of the economy, such as real estate and financial services; they announced direct material assistance for both of those industries (cue the double-and-then-some price pop of Up Fintech).

Yet a stimulus package, even one of the huge-scale ones favored by the Chinese powers that be, has its limits. This one has only been announced and has not been implemented. And although it's sure to help the domestic economy to some degree, it isn't some cure-all that's going to instantly lift it out of the doldrums. Beijing is talking the talk with its business booster; we'll see if it can walk the walk effectively.

Robust rallies also have a way of bringing out the profit-takers and the short-term speculators (which are frequently one and the same). That's especially true in this instance, when a wide variety of stocks had been ignored and sitting at depressed prices for quite some time and were suddenly jolted alive by the stimulus adrenaline shot. It's tempting for every investor to lock in a double- or even triple-digit profit for a mere few days of holding a stock. Such sell-offs helped bring about the fairly sudden reversal in prices on Thursday.

Don't count them out just yet

I don't think we've seen the last of the price pops. Rather, Thursday's correction feels to me more of a breather as market players contemplate their next move. It's going to take some time to implement the full stack of measures announced by the government, and it will still take longer to properly gauge their effects. In the meantime, investors will be jostling to place bets on the stocks best positioned to benefit from that energizing top-down injection of rocket fuel.

Should you invest $1,000 in Bilibili right now?

Before you buy stock in Bilibili, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Bilibili wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $728,325!*

Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of S&P 500 since 2002*.

See the 10 stocks »

*Stock Advisor returns as of September 30, 2024

Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Disclaimer: For information purposes only. Past performance is not indicative of future results.

Recommended Articles

Dollar index tops 100 for the first time since July as the Fed's hawkish dot plot sinks in The U.S. dollar index broke back above 100 for the first time since 31 July after the Fed delivered its first rate hike since 2023, with the dot plot showing 16 of 18 officials expect at least one more increase this year. Here are the levels that matter for DXY, the currencies feeling it most, and what to watch next.

Author Irene Q.

Sep 17, Thu

The U.S. dollar index broke back above 100 for the first time since 31 July after the Fed delivered its first rate hike since 2023, with the dot plot showing 16 of 18 officials expect at least one more increase this year. Here are the levels that matter for DXY, the currencies feeling it most, and what to watch next.

Gold ends three-week slide at the $4,400 line — eight straight days of ETF inflows vs a 5% 10-year and a 100 dollar Spot gold closed Friday at $4,378.39, up 0.84% on the day and about 0.8% for the week — its first weekly gain in four weeks — with the intraday high of $4,399.67 leaving it 33 cents shy of the $4,400 line. Gold ETFs have now logged eight straight sessions of inflows, but with the 10-year back above 5% and the dollar index near 100, here is what decides whether this is a reversal or a bounce.

Author Suzie

Sep 20, Sun

Spot gold closed Friday at $4,378.39, up 0.84% on the day and about 0.8% for the week — its first weekly gain in four weeks — with the intraday high of $4,399.67 leaving it 33 cents shy of the $4,400 line. Gold ETFs have now logged eight straight sessions of inflows, but with the 10-year back above 5% and the dollar index near 100, here is what decides whether this is a reversal or a bounce.

Dollar holds above 100 near a 3-month high — three Fed speakers and a $69 billion auction land tonight The dollar index closed at 100.43 on Monday, its highest close since late July, after a weekly gain of about 1% — the best in more than three months — and is holding above the 100.00 handle in Asia. Three Fed officials speak tonight alongside a $69 billion two-year note auction, the first leg of $183 billion of Treasury supply this week.

Author Suzie

Yesterday 06: 34

The dollar index closed at 100.43 on Monday, its highest close since late July, after a weekly gain of about 1% — the best in more than three months — and is holding above the 100.00 handle in Asia. Three Fed officials speak tonight alongside a $69 billion two-year note auction, the first leg of $183 billion of Treasury supply this week.

October hike odds climb toward 60% as Goldman and BofA both flip — what Warsh's "dose of accommodation" really changed Rate futures now price roughly 55% to 62% for a 25bp hike at the October 27-28 FOMC, up from about 30% before Chair Warsh's post-meeting framing that the Fed is merely "removing some accommodation." Goldman Sachs has added an October hike to its forecast and Bank of America now sees moves in both October and December. Here is the repricing, the language behind it, and the two data points that decide it.

Author Irene Q.

5 hours ago

Rate futures now price roughly 55% to 62% for a 25bp hike at the October 27-28 FOMC, up from about 30% before Chair Warsh's post-meeting framing that the Fed is merely "removing some accommodation." Goldman Sachs has added an October hike to its forecast and Bank of America now sees moves in both October and December. Here is the repricing, the language behind it, and the two data points that decide it.

Memory chips surge, Nasdaq notches a second straight record close — why the Dow fell 185 points anyway Micron gained 5%, SanDisk 6.8%, Seagate 4% and Western Digital 3% as the memory complex led the Nasdaq Composite to a second consecutive record close of 27,244.28. But the Dow fell 185 points as JPMorgan, Wells Fargo and Schwab slid more than 3% each — a split tape that says more about positioning than about the economy.

Author Irene Q.

5 hours ago

Micron gained 5%, SanDisk 6.8%, Seagate 4% and Western Digital 3% as the memory complex led the Nasdaq Composite to a second consecutive record close of 27,244.28. But the Dow fell 185 points as JPMorgan, Wells Fargo and Schwab slid more than 3% each — a split tape that says more about positioning than about the economy.

Popular Symbols