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by Steven Magallanes
Tuesday, July 16, 2024
π¦ 5 Reasons Why This Stock is a Steal At These Prices
As the dominant eCommerce giant, Alibaba Group Holding Ltd. (NYSE: BABA) is often considered the Amazon.com Inc. (NASDAQ: AMZN) of China. By sales, it's the third largest eCommerce giant in the world. With shares trading up just 3.6% year-to-date (YTD), it is also considerably underperforming the Nasdaq-100 index, up 20.8% YTD. With shares trading down nearly 75% from their all-time highs, this computer and technology sector leader stock has plenty of room to rebound. Here are five reasons why Alibaba stock may be a steal at these valuations. Alibaba’s Parts May Still Be Worth More Than the Whole In 2023, Alibaba announced that it would split the business into six separate entities to enhance shareholder value. .
A better-than-expected Retail Sales report helped the S&P 500 advance on Tuesday. However, the 0.0% monthly gain and 2.3% YOY comparison are tepid, casting a shadow of doubt on economic strength. At 2.3%, the increase in retail sales is insufficient to offset inflation, which means the volume of activity is contracting. In this environment, there is only so high that the S&P 500 can go before it contracts.
The S&P 500 is overextended at these levels and needs a healthy correction. The question is how much hang time the index will have at this peak and how deep the correction might be when it comes. Assuming no change in the news flow, the odds are high that the correction will be short and quickly lead to the next buying opportunity for index investors.
The trigger for the correction may be the July FOMC meeting in two weeks. The FOMC is not expected to cut rates at this meeting but is expected to signal the possibility of cuts coming soon. The CME FedWatch Tool shows the market pricing in a 100% chance for a rate cut in September. The risk for the S&P 500 is that interest rate cuts are already priced into the market, and the FOMC meeting will become a sell-the-news event.
As the dominant eCommerce giant, Alibaba Group Holding Ltd. (NYSE: BABA) is often considered the Amazon.com Inc. (NASDAQ: AMZN) of China. By sales, it's the third largest eCommerce giant in the world. With shares trading up just 3.6% year-to-date (YTD), it is also considerably underperforming the Nasdaq-100 index, up 20.8% YTD. With shares trading down nearly 75% from their all-time highs, this computer and technology sector leader stock has plenty of room to rebound. Here are five reasons why Alibaba stock may be a steal at these valuations. Alibaba’s Parts May Still Be Worth More Than the Whole In 2023, Alibaba announced that it would split the business into six separate entities to enhance shareholder value.
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Bank of America said its profits fell in the second quarter, as higher interest rates ate into BofA's expenses, including its large consumer banking franchise. But like Goldman Sachs, Bank of America saw a resurgence of activity in its investment banking division which helped make up for some of the weakness in other parts of the bank. The Charlotte, North Carolina-based bank said Tuesday it earned a profit of $6.9 billion, compared with $7.4 billion in the same period a year earlier. On a per share basis, BofA earned 83 cents, beating analysts' estimates. While Bank of America did see higher loan growth and more return on its assets in the quarter, much of the bank's interest income was eaten up by higher interest expenses.
The iShares Russell 2000 ETF (NYSE: IWM) experienced a significant breakout above multi-year resistance last week, sparked by the release of the CPI inflation data on Thursday. This move was one of the most eye-opening events of the week, drawing significant attention to small-cap stocks. IWM's Impressive Rally The iShares Russell 2000 ETF posted an impressive weekly gain of 6.11%, driven by lower-than-expected June inflation data. The CPI declined by 0.1% from May, putting the 12-month rate at 3%, around its lowest level in over three years, the Labor Department reported Thursday. This fueled speculation of potential interest rate cuts.
The International Monetary Fund on Tuesday upgraded its economic outlook this year for China, India and Europe while modestly lowering expectations for the United States and Japan. But it says worldwide progress against accelerating prices has been slowed by stickier-than-expected inflation for services, from airline travel to restaurant meals.Overall, the IMF said it still expects the world economy to grow a lackluster 3.2% this year, unchanged from its previous forecast in April and down a tick from 3.3% growth in 2023. "Global growth remains steady," Pierre-Olivier Gourinchas, the IMF's chief economist, told reporters.Still, the world economy's expansion remains unimpressive by recent historical standards.
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