U.S. equities rolled over on Thursday. Investors are worried about the fallout from a deepening slide in China’s currency. Foreign exchange markets are rapidly pricing in further trouble for Chinese currency — and Chinese stocks — as President Trump steps up his trade rhetoric. Already, $50 billion in tariffs against Chinese imports are coming in. Another $200 billion are on the way.
Beijing has yet to respond in kind, but it could be allowing its currency to decline to offset higher tariffs. The yuan fell to roughly a 12-month low overnight, dropping 0.8% against the dollar.
The situation looks like to to get worse before it gets better. Here are 4 Chinese stocks at risk:
4 Chinese Stocks at Risk From the Currency Crash: China Mobile (CHL)
China Mobile (NYSE:CHL) shares have been hit by reports the Trump Administration has cited national security concerns to deny China Mobile entry into the United States, keeping China’s largest state-owned telecoms away from American consumers. This blocks an application that had been pending since 2011.
The stock has been sliding for years since topping in early 2015 and is down 25% from the highs seen in late 2016.
4 Chinese Stocks at Risk From the Currency Crash: Alibaba (BABA)
Alibaba Group (NYSE:BABA) shares are threatening to fall back below their 200-day moving average and its 50-week moving averages, which would result in the first major downtrend for the stock since the doubling off of the late 2016 lows. The Chinese e-commerce giant is exposed not only to emerging weakness in China but also to any plans to expand more aggressively into the U.S. market.
The company will next report results on August 2 before the bell. Analysts are looking for earnings of $1.33 per share on revenues of $12.4 billion. When the company last reported on May 4, earnings of 91 cents per share beat estimates by three cents.
4 Chinese Stocks at Risk From the Currency Crash: Baidu (BIDU)
Baidu Inc (NASDAQ:BIDU) shares are threatening to fall below their 50-day moving average, remaining within the confines of a trading range going back to the fall of 2017. The company has made efforts to push into new technology ventures such as autonomous driving. But U.S.-China trade relations could sour any crossovers with Silicon Valley firms and hinder progress.
The company will next report results on July 26 after the close. Analysts are looking for earnings of $2.56 per share on revenues of $3.9 billion. When the company last reported on April 26, earnings of $2.60 per share beat estimates by 89 cents on a 36% rise in revenues.
4 Chinese Stocks at Risk From the Currency Crash: Weibo (WB)
Shares of Weibo Corp (NASDAQ:WB) — known as the Chinese Twitter — are threatening to fall below their late June lows capping a decline of nearly 40% from the highs last seen in March. Recent results have fallen short of analyst estimates, and the team at BNP Paribas recently initiated coverage with a Hold rating.
The company will next report results on August 8 before the bell. Analysts are looking for earnings of 66 cents per share on revenues of $428.9 billion. When the company last reported on May 9, earnings of 50 cents per share beat estimate say three cents on a 61% rise in revenues.
Anthony Mirhaydari is founder of the Edge (ETFs) and Edge Pro (Options) investment advisory newsletters. Free two- and four-week trial offers have been extended to InvestorPlace readers.
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