JD

JD.com, Inc.

64.85
USD
0.48%
64.85
USD
0.48%
41.56 92.69
52 weeks
52 weeks

Mkt Cap 86.70B

Shares Out 1.34B

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Why Shares of JD.com, Lufax Holding, and Dingdong Are Down Today

What happened Shares of several Chinese stocks trading on U.S. exchanges fell today as investors digested a lot of news coming out of China. Shares of the large e-commerce company JD.com (NASDAQ: JD) traded roughly 7.3% lower as of 10:52 a.m. ET today, shares of the financial services platform Lufax Holding (NYSE: LU) traded nearly 9% down, and shares of the online grocery platform Dingdong (NYSE: DDL) traded roughly 8% down. So what There has been seemingly good news for Chinese stocks recently, although it has failed to impress investors. President Joe Biden said yesterday that he would review some of the tariffs on Chinese imports first implemented by former president Donald Trump and would consider removing them. Biden's comments led to the yuan increasing by as much as 0.7%, the highest it's been since earlier this month. The Chinese government also made good on its promise to provide stimulus and rolled out the equivalent of $21 billion in tax rebates and more than $45 billion of railway construction bonds. But the market was unclear if that would provide enough support and instead continued to focus on COVID restrictions in the country that have been slowing economic growth. "Since supply chain disruptions and loss of public confidence are areas that Beijing has little control [over], cutting taxes and easing monetary policy are not likely to solve the problems much," said Chi Lo of BNP Paribas Asset Management, according to Bloomberg. Analysts at Goldman Sachs also are growing increasingly concerned about problems in China's real estate sector. Goldman analysts Kenneth Ho and Chakki Ting recently wrote in a research note that 22 issuers of high-yield bonds in China's real estate sector have missed payments on their bonds or deferred payments since the start of this year. Due to this trend, Ho and Ting are assuming that the default rate on high-yield Chinese property bonds will be around 31.6%, which is much higher than the analysts' prior forecasts of 19%. "We are unlikely to see a broader recovery in China Property HY (high yield) until property sales begin to show signs of a rebound," Ho and Ting wrote. Now what There has been a mix of news related to Chinese stocks since the week started, so it seems investors are following the drop in broader markets today. Truthfully, I was a little bit surprised to see the dip, considering the Chinese government actually rolled out stimulus and lived up to its promises. Also, you would think investors would cheer Biden's announcement that he'll be reviewing certain tariffs. But as with the broader markets, there is still a lot for Chinese stocks to overcome. COVID lockdowns have been devastating for the economy. Shanghai got hit particularly hard, and while the city is planning to fully reopen by mid-June, Morgan Stanley's chief China economist, Robin Xing, said while the worst might be behind the country, "we also think the road to recovery will likely be slow and bumpy." I actually think it's somewhat good news to see the Chinese government being more supportive of the economy and Chinese tech stocks lately, but there are factors outside its control, which continues to make things uncertain. 10 stocks we like better than JD.com When our award-winning analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.* They just revealed what they believe are the ten best stocks for investors to buy right now... and JD.com wasn't one of them! That's right -- they think these 10 stocks are even better buys. *Stock Advisor returns as of April 27, 2022 Bram Berkowitz has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Goldman Sachs and JD.com. The Motley Fool has a disclosure policy. The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. Founded in 1993 in Alexandria, VA., by brothers David and Tom Gardner, The Motley Fool is a multimedia financial-services company dedicated to building the world's greatest investment community. Reaching millions of people each month through its website, books, newspaper column, radio show, television appearances, and subscription newsletter services, The Motley Fool champions shareholder values and advocates tirelessly for the individual investor. The company's name was taken from Shakespeare, whose wise fools both instructed and amused, and could speak the truth to the king -- without getting their heads lopped off.

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