JD Stock Pops on Earnings, Brighter China SentimentNov 15, 2023
Investors are feeling more confident as Biden and Xi meet
With President Biden and Xi Jinping meeting in San Francisco, the market is feeling more bullish about Chinese stocks as e-commerce player JD rose sharply on a solid earnings beat.
JD beat expectations in Q3 by generating a $0.92 EPS from $34.2 billion in revenue. While costs are getting more and more under control, this revenue beat is also another strong signal that China's recovery and reopening are gathering strength, which can help offset all the fear being pumped out by Chinese property markets.
SAFE PORTS IN A STORM
Of course, e-commerce isn't the whole economy. Both Alibaba and JD both experienced growth last quarter as well while Chinese GDP contracted. JD is also raising revenue despite significant cost cuts, signaling that efficient players in the Chinese system are going to be able to stay afloat even if the broader slowdown deepens.
WHY IT MATTERS
Any positive signal coming out of China right now is going to help bolster investor confidence. If China can push through this slowdown and actually restart their economic engine, that can bolster global recovery efforts as well. Furthermore, any positive trade news coming out of Xi Jinping's meeting with Biden today can help thaw overall investor sentiment. Things might be turning a corner across the Pacific, but we need more data to be sure the Chinese housing crisis won't drag things down further. But, this beat was enough to pump JD stock up over 7% in early trading.