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Some Of Alibaba’s Fundamentals Look Ugly; Could That Be A Buy Signal?


Alibaba’s (NYSE:BABA) technical chart looks downright ugly, and it comes at a time when some of its fundamentals aren’t looking too good either.

There are many triggers for this sudden downfall. The most important one, which is not specific to Alibaba, is the escalating trade war between China and the US, the world’s two largest economies. Many investors fear President Donald Trump’s trade tariffs on Chinese imports will hurt the Chinese economy badly.

Alibaba stock, however, also has a couple of other problems that are making investors nervous. To begin with, its earnings momentum seems to be slowing down, pressured by heavy investments the company is making to build scale in Southeast Asia, a region that’s central to its global growth.

The near-term future of the stock depends on the resolution of trade disputes and how quickly both countries involved are able to strike a deal. Over the long run, however, we remain bullish on Alibaba. It provides unique exposure to the world’s second-largest economy as well as Asia’s other emerging markets.

The consensus in the market is that Alibaba shares will rebound once the geopolitical issues are resolved and Chinese stocks began to once again trade on their actual fundamentals. The majority of analysts on Wall Street have a buy rating on Alibaba, with an average $230.35 price target, implying about a 32% upside potential from yesterday’s $157 close.

Regardless of the short term targets, we believe Alibaba is the sort of stock buy-and-hold investors could consider on every dip.


AUD/USD Bulls Pin Hopes On Data Amid Strong Bearish Trend

By Faraday Research

Two weeks ago, we noted that AUD/USD was testing a 20-month low on a “perfect storm” of bearish news. With trade and geopolitical tensions still running high, concerns about mortgage rates and metal prices remaining elevated and bond yields continuing to fall, the fundamental outlook for the Australian economy is little changed.

Technically speaking, the outlook has, if anything, worsened further.
So far this week, rates have held below previous support at 0.7145, increasing the likelihood that the breakdown is legitimate.

Looking at the secondary indicators, there’s little to suggest that AUD/USD is at a significant bottom yet. For its part, the RSI indicator remains locked in a bearish range, consistently topping out around the 55 level, far from the “70” level that indicates bullish momentum. Moreover, the RSI has hit a new low along with price, eliminating the possibility of a divergence forming in the near term. Meanwhile, the MACD indicator continues to trend lower beneath both its signal line and the “0” level, showing strong bearish momentum.


FTSE 100 Price Continues to Slide on Brexit News Despite Stable GBP

By Martin Essex, MSTA

Reports of unrest within the ruling UK Conservative Party are continuing to damage the FTSE 100 index of leading London-listed stocks. According to reports, some 50 Conservative Members of Parliament have met to discuss ousting Prime Minister Theresa May, who they argue has taken too soft a line of the Brexit negotiations between the UK and the EU.

With the FTSE 100 index having dipped on Tuesday to its lowest level since April 17, further losses cannot be ruled out ahead of and after the Thursday meeting of the Bank of England’s Monetary Policy Committee, which is expected to leave all its monetary settings unchanged.


Here’s Why Microsoft (MSFT) Stock Is A Strong Buy Right Now

By Benjamin Rains

Microsoft MSFT saw its stock price pop over 1% Tuesday morning as it inches toward its all-time high. With no major news to speak of, let’s see why Microsoft stock looks like a strong buy at the moment, especially as the likes of Facebook FB and Alphabet’s GOOGL Google face heightened scrutiny in Washington.

Microsoft has continued to jump deeper into artificial intelligence, IoT, and cloud computing. Microsoft, which grabbed 14% of the cloud market last quarter, is currently the second-largest cloud provider behind Amazon’s AMZN 34%. The firm also comes in well ahead of IBM’s IBM 8%, Google’s 6%, and Alibaba’s BABA 4%.

Looking ahead, our current Zacks Consensus Estimate is calling for Microsoft’s fiscal Q1 revenues to climb by nearly 13.4% to hit $27.83 billion. MSFT’s fiscal 2019 revenues are expected to reach $122.36 billion, which would mark a roughly 11% jump.

Coupled with the firm’s growing strength in cloud computing, along with its overall top and bottom-line outlook, MSFT stock appears to be one that investors should think about buying at the moment.


CAD Soars as Canada Ready Key Concession to Reach NAFTA Deal

By Justin McQueen

Economic data has been very encouraging for Canada with GDP tracking above the BoC’s forecasts at 2.9%, while inflation is at the top end of the central banks range 1-3% range. Consequently, the BoC are expected to lift interest rates again next month, with OIS markets attaching a 63% probability of a 25bps hike. That said, provided a NAFTA agreement is reached, the Bank of Canada may signal a more aggressive tightening stance, which had been suggested by the Deputy Governor, Wilkins, who noted that the rate setters had considered whether to remove “gradual approach” to their rate guidance. If indeed a NAFTA agreement is reached, a repricing of a December rate hike could spark a notable bid in the Canadian Dollar.


Intel’s stock falls into first bear market in over 2 years

By Tomi Kilgore

Intel Corp.’s stock has taken a technical beating this week, as it entered a bear market on Tuesday for the first time in over two years, the day after a bearish “death cross” appeared in the charts.

Many see that chart pattern, known as a “death cross,” as marking the spot a shorter-term uptrend flips to a longer-term downtrend.

Many chart watchers believe a bear market begins after a decline of 20% or more from a bull-market peak on a closing basis, and doesn’t end until a rise of 20% or more off the bear market trough.

Intel’s selloff comes amid concerns over chip-supply shortages exiting the third quarter, which increases risk to the downside in the second half of the year, Barclays analyst Blayne Curtis wrote in a Tuesday note to clients.


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