【Today’s Focus】Coca-Cola
Focusing on the linkage effect of U.S. stocks and A-shares, China Business Channel 7:30-8:00 "From Wall Street to Lujiazui" opens the market door for you.
US stock market
The Dow rose 0.30% to 22,092 points
The S&P 500 rose 0.19% to 2,476 points
The Nasdaq rose 0.18% to 6,351 points
international oil prices
U.S. WTI crude oil September futures rose 1.12% to close at $49.58 a barrel
Brent crude oil October futures fell 0.79% to close at $52.42 a barrel
WTI crude oil futures fell about 0.4% last week, while Brent crude oil futures fell about 0.2%.
international gold price
COMEX December gold futures fell 0.8% to $1,264.60 an ounce
Since its launch on August 1, Bitcoin Cash (BCC) has experienced a rollercoaster-like ups and downs in just a few days. According to CoinMarketCap data, the market value of BCC (Bitcoin Cash) has fallen from third to fourth place, from approximately US$7 billion to approximately US$3.5 billion, which was cut in half.
The opening price of BCC on the domestic trading platform Viabtc (microbit) was 1,478.93 yuan on August 1, and the price rose to a maximum of 4,507.33 yuan on August 2. It started a downward trend from August 3 to 5, with the lowest point on the 5th being 1,411 yuan, and the opening price on the 6th reaching a new low of 1,390 yuan. The BCC price of Bitcoin China, another trading platform, hovers around 2,300 to 2,500 yuan.
A special analyst at Huobi.com said that in order to prevent losses to user funds caused by replay attacks during the Bitcoin fork, domestic trading platforms such as Huobi.com suspended deposits and withdrawals of Bitcoin at the end of July, resulting in an imbalance in the power of buyers and sellers after the BCC/BTC (Bitcoin) pair went online. The seller was weak, and the price of the BCC/BTC pair continued to rise. As major trading platforms opened deposits and withdrawals on August 4, the selling pressure on BCC increased significantly, causing the price of BCC to plunge rapidly. According to data from Huobi.com, as of 15:30 on the 5th, the price of BCC/BTC was 0.118472, with the largest drop of 43.9% in two days.
As a new type of blockchain asset, BCC has changed the original intention of Bitcoin's technology and adopted dynamic difficulty adjustment. Many people in the currency circle said in an interview with China Business News that BCC has strong uncertainty in the short term: On the one hand, the instability of BCC's market price will cause investors to have risks in the process of investment; on the other hand, because BCC is essentially the product of disagreements on the issue of Bitcoin expansion, with the development of Bitcoin, there is the possibility of this risk reappearing.
At the same time, the formation of the value of BCC is also very complicated. It is affected by factors such as the stability of the technology and the recognition of the value of this competitive currency by the market (computing power and investment users). The value of BCC does not determine the value of Bitcoin. The opposite is also true. Tian Ying, vice president of OKCoin, said that although BCC inherits Bitcoin’s existing blockchain and everyone who holds Bitcoin naturally owns a corresponding number of new coins, BCC, like other new coins that have appeared in history, will not pose a threat to Bitcoin’s status.
The price of Bitcoin has even returned to highs. Bitcoin has been rising continuously in the past two days, breaking through a high of 20,000 yuan. According to the market data of OKCoin, a domestic trading platform, on August 6, Bitcoin once again hit a record high of 22,198 yuan. From the opening price of 18,944 yuan on August 1 to a new high of 22,198 yuan on the 6th, an increase of more than 15%.
As for Bitcoin's return to highs, analysts at OKCoin explained that the Bitcoin community was affected by the expansion in early July, causing panic among users, a significant reduction in market trading volume, and a wait-and-see state of funds, which caused the Bitcoin price to quickly fall back to its lowest point of around 12,900 yuan. At 4 a.m. on July 23, the Bitcoin expansion plan reached a consensus and BIP91 was activated. This allowed all Bitcoin enthusiasts and investors to see the phased results of the expansion event. The risk of Bitcoin forks was temporarily lifted, and investor confidence in it was also greatly enhanced.
In addition, affected by the price of Bitcoin returning to a high of 20,000 yuan, other cryptocurrencies in the top 10 digital assets by market value have remained relatively stable in the second half of this week, with ETH (Ethereum), ETC (Ethereum) and Litecoin all showing slight increases.
Guest perspective
(07/31–08/04) S&P 500 Index industry segment performance (0.2%):
Increase: hardware storage +4.4%, residential construction +3%, consumer appliances +3%, life science instruments 2.5%, fertilizers and pesticides 2%
Decline: medical services -7%, oil and gas exploration -4%, semiconductor equipment -4%;
Industry performance of the European Stoxx 600 Index (1.24%):
Increase: retail 2.5%, public utilities 2.3%, tourism and leisure 2%, food and beverage 1.7%
Decline: Basic Resources -0.8% Healthcare -0.5%;
Currency (07/28–08/04):
Increase: EUR +0.2%, DKK +0.13%
Decline: South African Rand -3% Canadian Dollar -1.7% Australian Dollar -0.8%
Products (07/28—08/04):
WTI crude oil -0.3%, diesel +0.7% gold -0.9% copper +0.7%, aluminum 0.2% silver -2.9% corn -2% wheat -5.5% soybean -5% coffee +1.7% cotton +1.1%
SP500: 13 companies fell by more than 10%, 3 companies increased by more than 10% (genetic testing lithium battery phosphate fertilizer), 27 companies fell by 5-10%, and the declining industries mainly came from the energy and medical fields;
If one considers the SP500 equal weight, the SP 500 fell 0.4%, in line with the NASDAQ's weekly decline of 0.4%, while the Dow rose 262 points to break 22,092 points;
The U.S. dollar index rose 0.76% on Friday (July non-farm payrolls 209,000); the SP500 index has low volatility, but the volatility of individual stocks has reached 22%, indicating low correlation. The SP500 is consolidating at a high level and has ultra-low volatility. Once the index drops by 3%, the spot VIX will rise by 11 points, while the 30-day VIX futures will reach 15, or an increase of 48%;
Mixed U.S. Economic Data and the Dollar:
The ISM manufacturing index in July was 56.3, lower than expected, but this value previously corresponded to 4% GDP growth; S&P constituents with a market capitalization of approximately US$19 trillion announced their second-quarter financial reports, 10% Y/Y, and Berkshire rose for 6 days in a row (second-quarter operating profit fell 11% year-on-year, B-share earnings per share fell 15% to US$1.73/share, traditional manufacturing retail railways experienced double-digit growth, and insurance underwriting was dragged down, with cash reaching US$100 billion)
Chinese and American Internet giants:
The profit growth rate of China's Alibaba, Tencent, Baidu, JD.com, NetEase and Ctrip (market value: US$1 trillion) is significantly higher than that of Amazon + FB + Activision Blizzard + GOOGL + NETFLIX + PRICELINE (market value: US$1.8 trillion). China's Internet has more investment value;
Eurozone:
The euro rose, telecoms, banks, and power utilities were bullish, while semiconductors and export manufacturing weakened.
Germany: Temasek intervenes in German companies and becomes a financial investor. Favored industries: industry, consumer agriculture, drug research and development
U.S. economic data next week (08-09—8-17):
8/9: Second quarter productivity (+0.5%) and unit labor cost (+1.2%)
8/10: Core PPI index +0.1% in July. Budget deficit in July was US$54 billion;
8/11: July core CPI index +0.1%
8/15: July retail sales +0.4% 8/16: 1,224,000 new housing starts;
8/17: Industrial production 0.3%, capacity utilization rate 76.7%;
Follow today
Gainer ANET
Focus on building 10/40/100 Gigabit Ethernet (GbE) switches
Its superb scalability, low latency, programmability and flexibility have been used by 7 of the 8 largest hyper-scale cloud computing companies. Based on the LINUX operating system, there are more than 8 million lines of code, and more than 1,000 man-years have been invested in developing advanced distributed system software (EOS). The advantage is that it can be programmed at all system levels; commercial chips and open source software.
The company's second-quarter financial report shows that 100G has won the favor of customers in the field of ultra-large-scale data centers. Second-quarter revenue was US$405 million, 12% higher than market expectations. The international market grew faster, with quarterly earnings per share of US$1.34, 45% higher than market expectations.
After cooperating with HP, it will achieve greater expansion in sales channels and effective cost control. The profit margin in the second quarter is close to 35%, much higher than the expected 25%. The company's product supply chain delay problem has also been improved, and some manufacturing tasks have returned to the United States.
More advanced 400G will bring significant revenue in 2019
ANET is up +75% this year, outperforming the S&P 500 by 11%, and short sellers account for 3.8% of outstanding shares
Risk: Patent lawsuit with Cisco pending
Potential Stock Grub
Grubhub acquires Yelp’s EAT 24 business, a win-win + $1 billion increase in market value
YELP second quarter financial report: revenue exceeded expectations ($209 million 20% Y/Y), the number of account activations was the second best in history, gross profit margin increased by 435 basis points (net profit margin 3.5%, EBITDA $21.6 million, much higher than the $7.4 million in the same period last year)), the sale of EAT24 brought about improvement in profitability ($288 million cash sale, $200 million stock repurchase); advertising revenue $187 million, 19% Y/Y, paid advertisers 148,000 18% Y/Y;
2017 full-year revenue expected range: US$855-865 million, EBITDA: US$143–153 million;
There are 20,000 restaurants on the GRUB and YELP platforms. If the transaction is completed during Halloween and Thanksgiving, there will be significant financial growth in the second quarter of 2018; the acquisition of the YELP business will bring synergistic benefits. Over time, the increase in volume will cover the increase in costs, ultimately driving up the improvement in profit margins.
GRUB's revenue in the second quarter met the target (US$159 million, 32% Y/Y), profit margin and repeat orders declined slightly (net profit margin 9.5% 15% Y/Y, or 17 cents/share) while active ordering users increased (9.18 million, 25% Y/Y), with an average daily volume of 313,900, 16% Y/Y; gross food amount was US$880 million;
Performance Outlook: 3rd quarter revenue expected range: US$155-163 million, EBITDA: US$38-42 million, full year 2017: revenue of US$642–666 million, EBITDA: US$170 million–180 million US dollars;
After the acquisition of FOODLER and EAT24, GRUB will increase its EBITDA by more than 30% in 2018.
market news
Central Bank: Explore the inclusion of systemically important Internet financial businesses into MPA
On the evening of August 4, the central bank stated in the "China Regional Financial Operation Report (2017)" that the risk points in the Internet financial field include incomplete licenses, illegal operations, insufficient risk management and control, disorderly competition in the market and other factors. Some Internet financial products have already had systemic importance, and it is necessary to prevent procyclical fluctuations and cross-market contagion of risks. The central bank proposed to explore the inclusion of large-scale and systemically important Internet financial businesses into the macro-prudential management framework, conduct macro-prudential assessments on them, and prevent systemic risks.
Rakuten's monthly losses of 600 million in China are no longer affordable and can only last until the end of the month
Korean media reported on August 6 that Lotte Group has recently decided to make structural adjustments to its business in China and will reduce the number of Lotte Mart stores in China and lay off employees. Lotte Mart's monthly operating losses are as high as 100 billion won (approximately 590 million yuan), and the cumulative operating deficit in the first half of this year alone has exceeded 83 billion won (approximately 490 million yuan). The person in charge of Lotte Mart said that judging from the current situation, it can only last until the end of this month at most, and hopes that the group will formulate future countermeasures as soon as possible.
The national team has begun to tilt towards small and medium-sized enterprises
According to Securities Market Red Weekly, as the market turns into a shock at 3300 points, large-cap stocks and cyclical stocks, including the Shanghai Composite 50, will continue to maintain rotation with small- and medium-cap stocks. In the short-term market, we are expected to see large-cap stocks taking the stage with small-cap stocks. In addition to buying heavy-weight cyclical stocks, funds mainly focused on the national team have recently begun to consciously tilt towards small and medium-sized entrepreneurial stocks.
Among them, the social security fund has been investing in sectors such as electricity, automobiles, materials, and medicine as well as small and medium-sized startup stocks since the second quarter. Subsequently, CSI Financial Holdings, Huijin, and Shenzhen-Hong Kong Stock Connect have also followed suit to varying degrees.
This week, the two cities lifted the ban and the market value was about 40 billion yuan, a decrease of 50% from the previous month.
According to data from Southwest Securities, a total of 24 companies in Shanghai and Shenzhen stock markets have had their restricted shares released for circulation this week, with a total of 3.565 billion shares released. Calculated based on the closing price on August 4, the market value of the Shanghai and Shenzhen stock markets this week was 40.468 billion yuan, a month-on-month decrease of 59.35%.
The first "10 for 30" stock was investigated and a large number of restricted stocks were just lifted.
Easytech (300376) suddenly announced on the evening of August 3 that the company was suspected of violating securities-related laws and regulations due to information disclosure, and the company's chairman He Sime was suspected of violating securities-related laws and regulations, and has been investigated by the China Securities Regulatory Commission.
The Social Security Fund reduced its holdings in Dahua Co., Ltd. and two companies won bids for major contracts
Dahua Shares: Net profit increased by nearly 40% in the first half of the year. Social Security Fund reduced Huijin’s shareholding unchanged; Wanxiang Qianchao: The controlling shareholder increased its holdings by 1% and plans to continue to increase its holdings; Sinoma International: Won the bid for a 1.877 billion Argentine project; Ningbo Construction Engineering: The consortium preliminarily won the bid for a 679 million project
Terry Gou: Investment in China and the United States will increase in the future
Foxconn Group President Terry Gou met with Michigan Governor Snyder in the Shenzhen headquarters. The two sides met for nearly two hours. Terry Gou said that Foxconn has contacted several states in the United States. The amount cannot be announced yet. The investment direction will be next-generation automotive technology, such as Internet of Vehicles and driverless driving. He hopes to bring back American artificial intelligence technology and bring Foxconn's precision mold manufacturing out. Terry Gou said that Foxconn will increase its investment in China and the United States in the future, and will not invest in just one side.
Wolf Warrior 2's box office exceeds 3 billion and is expected to become the box office champion
According to Maoyan Movie data, as of 15:50 on August 6, the box office of "Wolf Warrior 2" has reached 3.006 billion yuan. Currently, the box office of "Wolf Warrior 2" ranks first among the 2017 movie box office. The top-grossing movie in 2016 was "Mermaid", with a cumulative box office of 3.392 billion yuan. Analysts say it is only a matter of time before "Wolf Warrior 2" breaks this record.
140 companies have announced earnings forecasts, and nearly 80% of them are positive.
According to Databao, in addition to companies that have released performance reports, 140 of the companies scheduled to disclose their semi-annual reports next week have already announced performance forecasts. The types of performance forecasts show that 92 companies predict increases, 13 predict profits, accounting for nearly 80% of the total. Another 19 companies predict performance declines, 8 companies predict performance losses, and 8 companies predict flat performance. Among the companies with good performance reports, based on the median expected net profit growth, there are 38 companies with a median net profit growth of more than 100% in the first half of the year.
Chinese concept stocks
The opinions expressed in this article are for reference only and do not constitute investment advice. Investment is risky and you should be cautious when entering the market.
