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The Zacks Analyst Blog Highlights: iQIYI, Alibaba Group Holding, Baidu, Bitauto Holdings and Sohu.com


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For Immediate Release

Chicago, IL - June 28, 2018 - Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include iQIYI, Inc. IQ , Alibaba Group Holding Limited BABA , Baidu, Inc. BIDU , Bitauto Holdings Ltd. BITA and Sohu.com Ltd. SOHU .

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Here are highlights from Wednesday's Analyst Blog:

Can China Survive a Trade War?

On Jun 25, shares of U.S.-listed Chinese companies plummeted on reports of the White House planning to curb Chinese investments in U.S. companies involved in certain technologies. On Jun 26, the benchmark Shanghai composite officially entered the bear market. Trade war fears have been taking its toll on China's stocks as the Chinese government is striving hard to protect the economy.

In this connection, China's central bank on Jun 24 said it will release as much as 700 billion yuan ($107 billion) into the financial system by reducing the amount of deposits majority of the banks are needed to hold. Understandably, the Chinese government's concerns revolve around its economy that is weakening faster than expected, fueled by fears of a trade war with the United States.

China Stocks Enter Bear Market Territory

The Shanghai Composite Index fell 0.5% at close on Tuesday, declining 20% from its January peak. This is its lowest level in two years and Chinese stocks are now officially in the bear market. China's stocks have lost almost $1.6 trillion since January, which is more than the size of Canada's economy. Another loss of 6% in market cap would dethrone China as Asia's biggest stock market. The smaller Shenzhen composite had entered the bear territory in February.

Trump seems to be the new dragon in China! Goes without saying, trade war fears with the United States have made investors jittery, leading to huge selloffs. The recent decline comes in response to news of White House planning to curtail Chinese investments in U.S. technology companies. Although China's President Xi Jinping has retaliated with counter tariffs on $34 billion worth of U.S. goods that come to effect on Jul 6, tension is sky-high.

This saw shares of U.S.- listed Chinese companies declining sharply on Monday. Understandably, the tech sector has been one of the biggest victims of this trade spat, with shares of all major Chinese tech giants falling sharply. On Monday, shares of U.S.-listed Chinese companied tanked 3.4%, their steepest collective decline March.

Chinese streaming giant iQIYI, Inc. was the biggest loser, declining 9.4%. Shares of IQ have declined 18.5% in the last five days. Other tech companies like Alibaba Group Holding Limited, Baidu, Inc. have declined 7.2%, 5% and 5.3%, respectively, in the same time frame.

That's not all. Shares of Bitauto Holdings Ltd. declined 1.1%, while Sohu.com Ltd. fell 6.5% in the last five days. Baidu has a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .

China Building Wall Around its Economy

Trade war fears cease to ease with the United States and China slapping tariffs and counter tariffs on each other. This certainly has been taking its toll on China's economy. The Chinese economy put up a robust performance last year, growing 6.9%. The momentum continued at the beginning of 2017 but economists believe that signs of a slowdown have started showing. And this has heighted because of the ongoing trade spat.

On Sunday, China's central bank announced that it will be releasing 700 billion yuan ($107 billion) into the country's financial system by reducing the amount of deposits banks are required to hold. The banks have been freed to use this money to help small businesses and heavily indebted companies.

Understandably, China is struggling to curb huge debts taken by companies that have over the past decade been hurting the economy. This certainly is thwarting growth and China now plans to help these companies by steering loans. Moreover, this comes at a time, when China is already fearing that tariffs imposed by the United States will hurt is ailing economy.

Summing Up

The White House's recent announcement that it plans to curb Chinese investment in U.S. technology companies is taking its toll on shares of tech companies. This finally saw the Shanghai Composite Index officially entering in the bear territory. China, understandably, is making every effort to balance the situation by releasing more money into its financial system to bail out the heavily indebted companies.

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About Zacks Equity Research

Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.

Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.

Strong Stocks that Should Be in the News

Many are little publicized and fly under the Wall Street radar. They're virtually unknown to the general public. Yet today's 220 Zacks Rank #1 "Strong Buys" were generated by the stock-picking system that has nearly tripled the market from 1988 through 2015. Its average gain has been a stellar +26% per year.  See these high-potential stocks free >>.

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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance  for information about the performance numbers displayed in this press release.


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Alibaba Group Holding Limited (BABA): Free Stock Analysis Report

Sohu.com Inc. (SOHU): Free Stock Analysis Report

Baidu, Inc. (BIDU): Free Stock Analysis Report

Bitauto Holdings Limited (BITA): Free Stock Analysis Report

iQIYI, Inc. Sponsored ADR (IQ): Free Stock Analysis Report

To read this article on Zacks.com click here.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.



This article appears in: Investing , Stocks
Referenced Symbols: BABA , SOHU , BIDU , BITA , IQ



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