U.S. stocks showed signs of a potential bounce on Tuesday morning, albeit a modest one. Stock index futures were up as much as a third of a percent shortly before the regular trading session began on Wall Street.

One factor that has weighed on investor sentiment recently has been the ongoing battle that the Chinese government has waged against the COVID-19 pandemic. China has been a lot more stringent with its lockdown measures to stem the potential spread of the disease, and that has raised concerns about how much downward pressure the government's actions could have on economic activity. With Chinese citizens now starting to protest lockdowns and other restrictions, the prospects for eliminating the zero-COVID policy in favor of a more lenient alternative are giving many well-known stocks in China a boost on Tuesday morning.

What China could do

Investors in Chinese companies got more comfortable after hearing comments from China's National Health Commission (NHC). The governmental body said that it would make a greater effort to provide COVID-19 vaccinations for its elderly population, aiming to protect those over 80 and making booster shots available sooner after primary vaccinations. The NHC is also looking to launch a campaign to convince those who are reluctant to get vaccinated that the benefits of COVID-19 vaccines outweigh any perceived downsides.

Interestingly, the reaction to recent protests in China has been mixed. At first, investors feared that the Chinese government would crack down on protestors with COVID-19-related measures that could be stricter than current guidelines. However, more market participants seem to view the protests as potentially having a positive influence in persuading government officials to loosen their zero-COVID policy.

That's a big part of why some major Chinese stocks moved higher in premarket trading Tuesday morning. Alibaba Group Holding rose 5%, matching gains from electric vehicle companies Li Auto and XPeng. Baidu climbed 6%, while JD.com moved 7% higher.

Solid earnings from Bilibili

Also boosting sentiment on Chinese stocks, Bilibili (NASDAQ: BILI) released its latest quarterly results on Tuesday, and the stock climbed 10% in response. The online gaming and digital media company reported solid gains in the third quarter, including an 11% rise in revenue year over year to $814.5 million. Net losses narrowed by 36% from year-ago levels to $241 million as Bilibili reported a 25% rise in daily active users to 90.3 million. Almost 333 million people now use the service on a monthly basis, and while less than 10% of those users actually pay for a premium subscription, Bilibili reported high levels of engagement.

Shareholders were pleased to see Bilibili responding proactively to macroeconomic threats. Already, Bilibili's numbers are reflecting more efficient operations, as gross margin improved and expenses for sales and marketing fell as a percentage of total revenue. The company anticipates continuing to control its costs strictly, with an eye toward unlocking even more savings as it aims to become consistently profitable as soon as it can.

More hurdles ahead

COVID-19 is only one of the factors that have weighed on Chinese stocks in recent years. Turbulent foreign relations between China and the U.S. have led to volatility, while structural aspects of the Chinese economy have introduced systemic risks for investors to consider. Talk of potentially delisting Chinese stocks has quieted in Washington, but it could come back in 2023 and beyond.

Nevertheless, progress toward moving beyond the zero-COVID policy seems to be giving investors more comfort in investing in Chinese stocks. Those who are comfortable with the risks could find interesting opportunities in China. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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This year has not been kind to the BetaShares Asia Technology Tigers ETF (ASX: ASIA). This technology-focused ASX exchange-traded fund (ETF) was arguably a favourite of growth investors for many years, thanks to some impressive returns in its early days.

But this year has been especially brutal for this ETF. Since the dawn of 2022, BetaShares Asia Technology Tigers units have lost a painful 35%. That's based on yesterday's closing price of $6.15.

Since the ETF's all-time high of over $14 a unit that we saw back in early 2021, the fund is down more than 56%.

Now, one might assume this may have something to do with China. After all, the world's second-largest economy has arguably been undergoing some changes in investors' perceptions in the past year or two.

Between trade wars with the United States, tensions over the Taiwan Straight, and the country's zero-COVID policies, investors have had a lot of fat to chew.

But exactly how exposed to the Chinese market is the BetaShares Asia Technology Tigers ETF?

How exposed is the BetaShares Asia Technology Tigers ETF to China?

Well, let's go to the source. According to the provider, as of 30 September, the Asia Tigers ETF's portfolio was weighted 55.2% towards companies domiciled in China. That was far higher than any other country. That includes Taiwan at 20.2% and South Korea at 15.9%.

We can see this reflected in the ETF's major holdings. Chinese e-commerce giant Alibaba Group was by far the fund's largest individual holding. It accounted for a whopping 10.2% weighting in its portfolio.

Another Chinese giant – Tencent Holdings – made up 9.3%, while Pinduoduo Inc and JD.com Inc accounted for a further 6.1% and 5%, respectively.

So we can rather decisively conclude that this ETF is heavily exposed to the Chinese markets.

And this partly explains why this ETF has had such a rough trot in 2022 thus far. Alibaba stock is down a nasty 36.35% so far this year. Tencent is faring even worse, sitting at a 45.5% loss.

Thus, it seems that the Asia Tigers ETF has been hit hard by its heavy exposure to the Chinese markets in 2022 so far. But who knows what the future might bring.

The BetaShares Asia Technology Tigers ETF charges a management fee of 0.67% per annum. It has now returned an average of 3.21% per annum since its inception in September 2018.

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Amazon (NASDAQ: AMZN) and Alibaba (NYSE: BABA) might initially look very similar. Both companies are e-commerce leaders that have built up massive cloud infrastructure platforms as their secondary businesses. Both have also expanded their sprawling ecosystems into adjacent markets such as video games, streaming media, and smart speakers.

But dig a little deeper and those superficial similarities quickly fade away. Today I'll examine the key differences between Amazon and Alibaba, how they affect the market's perceptions of both stocks, and if either tech giant is still worth investing in.

Don't call Alibaba the "Amazon of China"

Alibaba is often referred to as the "Amazon of China," but that casual comparison glosses over three key differences.

First, Alibaba actually generates all of its operating profits from its commerce (online and offline retail) businesses. Its cloud segment, Alibaba Cloud, continues to rack up operating losses and can only squeeze out a razor-thin profit on an adjusted earnings before interest, taxes, and amortization (EBITA) basis. That makes it the polar opposite of Amazon, which consistently generates most of its operating profits from Amazon Web Services (AWS), the largest cloud infrastructure platform in the world.

In other words, Alibaba at this point is still subsidizing the expansion of its cloud platform, which is the largest in China, with the growth of its retail marketplaces. Amazon subsidizes the expansion of its lower-margin retail business with its ongoing expansion of AWS.

Second, Alibaba still generates most of its revenue in China, but it's been a top target of the country's antitrust regulators. It was slapped with a record $2.8 billion fine last year, then forced to end its exclusive deals with top merchants and rein in its promotional deals. Those setbacks arguably made it easier for rivals like JD.com (NASDAQ: JD) and Pinduoduo (NASDAQ: PDD) to gain ground on Alibaba. Amazon also faces some regulatory challenges across the world, but its business is much better diversified, with more than a dozen region-specific marketplaces.

Lastly, the Securities and Exchange Commission has threatened to delist Alibaba and other Chinese stocks from U.S. stock markets as early as next year if they don't comply with U.S. auditing standards. That unresolved threat could prevent most investors from buying Alibaba as a long-term investment. 

Alibaba faces a tougher slowdown than Amazon

Alibaba's revenue rose by 19% to 853.1 billion yuan ($134.6 billion) in its fiscal 2022, which ended March 31. Its Chinese commerce revenue rose 18%, and its cloud revenue increased 23%.

But in its fiscal 2023, analysts expect its revenue to increase by just 9% as it grapples with macroeconomic and competitive headwinds for its e-commerce business, as well as a slowdown in cloud spending by large internet companies.

Amazon's revenue rose 22% to $469.8 billion in 2021. Its North American sales grew by 18%, its international sales increased by 22%, and its AWS sales jumped by 37%.

However, Amazon expects its e-commerce growth to cool off in a post-lockdown world, with supply chain and inflationary headwinds exacerbating that pressure. As a result, analysts expect Amazon's revenue to rise by only 12% this year. On the bright side, they expect AWS to continue growing at a healthy clip.

But Amazon faces a steeper earnings decline

Alibaba and Amazon both intend to ramp up their spending as their revenue growth slows down. Alibaba plans to pour more cash into its discount marketplaces (Taocaicai and Taobao Deals) to counter Pinduoduo and JD's Jingxi in the lower-end market, and to continue increasing its mix of first-party sales -- which will squeeze its margins, but will help it address the quality control and logistics issues across its third-party marketplaces. It will also continue expanding its lower-margin overseas marketplaces.

Analysts expect Alibaba's net income to rise by 53% in its fiscal 2023, but that's only because it's lapping a very easy comparison to its 59% decline (which included its antitrust fine) in fiscal 2022.

Amazon is grappling with higher fuel and labor costs, as well as the ongoing pressure to allow its workers to unionize. At the same time, it's increasing its investments in its digital ecosystem (videos, music, and games) to lock in its Prime subscribers. Analysts expect all those headwinds to reduce Amazon's net income by 76% in 2022.

Which stock is the better buy?

Alibaba trades at less than 10 times this year's adjusted earnings estimate, while Amazon has a much higher forward price-to-earnings ratio of 48. Both multiples have been slightly skewed by the companies' elevated spending plans for their current fiscal years, but both stocks still look cheap relative to their top-line growth, trading at about 2 times this year's sales. 

Alibaba might initially appear to be the better bargain, but its stock won't command a higher premium until it stabilizes its e-commerce businesses and overcomes its regulatory headwinds in China and the U.S. As for Amazon, its stock could also remain in limbo until it reins in its spending again.

That said, I believe Amazon is still a better buy than Alibaba now because it's growing faster, it's better diversified, and it doesn't face any delisting threats. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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Investors endured another round of selling in the stock market, piling on after last week's turbulent performance. For six months now, major market benchmarks like the Dow Jones Industrial Average (DJINDICES: ^DJI), S&P 500 (SNPINDEX: ^GSPC), and Nasdaq Composite (NASDAQINDEX: ^IXIC) have consistently lost ground. The S&P is inching closer toward joining the Nasdaq in bear market territory with a 17% drop from its highs at the beginning of the year.

Data source: Yahoo! Finance.

One area that has been hit especially hard lately is the e-commerce industry. Companies thrived in 2020 and 2021 as consumers had to resort to internet-based shopping during pandemic-related lockdowns. Now, though, reopening trade has many investors feeling like the heyday of these stocks is over. Moreover, with geopolitical pressures emerging onto the global scene, some believe that the factors that made e-commerce as lucrative as it was could be fading. Below, we'll look at some of the stocks seeing big losses and assess their longer-term prospects.

Big losses in internet retail

Today's session had some big losses, but many of the bottom performers were in the global e-commerce arena. Consider the following:

• Latin America's MercadoLibre (NASDAQ: MELI) fell 17%.
• In Singapore, Sea Limited (NYSE: SE) was down more than 15%.
• E-commerce supporter and buy now/pay later specialist Affirm Holdings (NASDAQ: AFRM) gave up more than 17% of its value.
• Canadian e-commerce platform provider Shopify (NYSE: SHOP) fell 10%.
• Online auto specialist Carvana (NYSE: CVNA) was down around 16.5% on the day.
• South Korea's Coupang (NYSE: CPNG) was one of the biggest losers, falling more than 22%.

As you can see, the selling was relatively indiscriminate and worldwide in scope. Even giants in the industry saw sizable declines, with Amazon.com (NASDAQ: AMZN) falling 5% and China's Alibaba Group (NYSE: BABA) posting a nearly 6% drop.

Most of these declines merely added to much more extensive drops over the past several months. The six stocks in the bullet points above are all down between 60% and 90% from their best levels over the past year, and even Amazon and Alibaba have fallen 40% to 60%.

The long-term picture for e-commerce

E-commerce has made itself an integral part of the overall retail industry, and its long-term prospects remain favorable. Industry watchers see e-commerce continuing to gain market share from brick-and-mortar stores, with one analyst seeing $17.5 trillion in global digital commerce taking place by 2030, up from just over $4.2 trillion in 2020.

But just because there's more e-commerce activity doesn't automatically mean that investing in the space will be equally lucrative. Greater competition could drive margins down, while higher logistics costs could weigh on profitability as well. However, if retailers try to take back some of the features that have made e-commerce popular, such as fast shipping at little or no cost, it could set back prospects for internet retail growth.

The wild card in e-commerce is the extent to which the industry has relied on functional global supply chains. If the free flow of goods comes to a halt, it will have ramifications for the entire retail industry, but e-commerce in particular could see its anticipated higher growth rates come to a standstill.

Lastly, investors need to remember that despite their recent drops, most of these stocks are still sporting solid gains. Amazon has doubled since late 2017, while MercadoLibre and Shopify have tripled and Sea is up nearly 300%. Those huge swings serve as a reminder that the price of extremely high returns from high-growth stocks can be massive volatility, making it essential to find the best stocks earlier rather than later.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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The stock market continued its recovery on Tuesday, with solid gains that suggested investors have gotten past all the uncertainty that has hit Wall Street recently. There hasn't been much resolution to all the headwinds buffeting the business world, but market participants nevertheless seem to believe that the bear market in the Nasdaq Composite (NASDAQINDEX: ^IXIC) and corrections in other indexes have been overblown.

As of 1:30 p.m. ET today, the Dow Jones Industrial Average (DJINDICES: ^DJI) had risen 260 points to 34,831. The S&P 500 (SNPINDEX: ^GSPC) rose 44 points to 4,333, while the Nasdaq had gained 220 points to 14,058.

A couple of stocks stood out as showing new signs of investor enthusiasm from a couple of different angles. Alibaba Group Holding (NYSE: BABA) moved sharply higher, showing renewed interest in Chinese stocks. Meanwhile, GameStop (NYSE: GME) posted a massive advance in a victory for meme stocks. Below, we'll look more closely at the latest from both of these companies.

Alibaba boosts its buyback

Shares of Alibaba Group were up more than 12% in early afternoon trading on Tuesday. The Chinese internet giant made its own big bet on its stock, and investors were eager to ride its coattails. 

Alibaba announced that it would increase the size of its stock repurchase program. Previously, the tech company had authorized $15 billion to buy back stock, but the new authorization expanded that plan to $25 billion. Indeed, today's move marked the second time Alibaba had raised the size of its buyback plans, having started with just $10 billion in December 2020.

Alibaba's past buyback activity hadn't prevented a swoon in its share price up to this point, however. The company's most recent financial results showed that it spent $1.4 billion repurchasing 10.1 million shares in the fourth quarter of 2021, yet shares went on to lose nearly half their value after that report before bouncing back. Even now, share prices are 10% to 20% below the average price Alibaba paid on its repurchases during the last quarter.

U.S. investors remain concerned about whether the Chinese government will continue a harsh regulatory crackdown on Alibaba and its big-tech peers. Nevertheless, with shares at bargain prices, it's been harder to pass up Alibaba than it has been for a long time. 

Winning the game

Meanwhile, shares of GameStop were up nearly 30%. There wasn't any particularly noteworthy news from the meme stock standout today, but after having fallen to its worst levels since its late 2020 breakout, GameStop seemed to have investors focusing on what it hopes will be a promising future.

GameStop's earnings last week didn't generate an immediate turnaround, but investors seem to be looking back and finding reasons for hope from the numbers. Sales were up 6% from the previous year's quarter and rose 18% year over year for the full 12-month period. Even though adjusted losses widened from year-earlier levels, shareholders now seem to be focusing more on the potential for top-line growth.

One thing that could generate some excitement is GameStop's plan to establish a marketplace for non-fungible tokens (NFTs), which have gotten a lot of attention lately. Even as the traditional crypto market has shown signs of slowing down, innovation in the NFT arena has continued at a healthy pace.

Retail investors helped drive GameStop's stock higher in its initial phase upward, and they seem to be behind today's move as well. Those investors can be fickle, but some truly see real potential for GameStop's turnaround story to get a Hollywood ending. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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What happened?

Shares of Alibaba (NYSE: BABA) were moving higher on Tuesday after the Chinese tech giant announced an increase in its share buyback program, signalling that management sees the stock as undervalued.

As of 12:22pm ET, the stock was up 10.7%.

So what?

On Tuesday morning, management revealed that the board had voted to boost the size of its share repurchase authorization from $15 billion to $25 billion, equivalent to about 8% of the stock's market cap after the morning's gains. The company did not explain the move, but called it a sign of confidence about its continued growth.

Alibaba shares surged last week after China's Vice Premier Liu He said that the government would act to support stability in the economy and financial markets, and that its ongoing crackdown on tech companies should be over soon. That announcement followed more than a year of tightening regulations on that country's tech companies. Alibaba was particularly targeted. The government in Beijing blocked the planned spinoff and IPO of Ant Group, its financial arm; levied a $2.8 billion anti-monopoly fine against it; and forced it to divest itself of several of its media assets. Those actions and similar ones involving other companies have rattled investor confidence in China. Alibaba stock fell by as much as 75%, and its peers experienced sharp declines as well.

Now what?

Following last week's announcement, Chinese officials have continued to send conciliatory signals to the market. Beijing now seems to believe its prior policies have gone too far, given that China's GDP growth slowed to just 4% in the fourth quarter, and Chinese stocks have lost more than $2 trillion in market cap.

Alibaba's share buyback announcement won't make a huge difference, but it's the latest sign that the tech giant is on the rebound after a forgettable year for investors.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Why Alibaba stock was soaring today appeared first on The Motley Fool Australia.

What happened

China stocks staged a remarkable rally on Wednesday, with shares of internet giant Alibaba (NYSE: BABA), for example, surging ahead a staggering 36.8% in one single session, online gamer Bilibili (NASDAQ: BILI) jumping a mind-boggling 47.6%, and video streamer iQIYI (NASDAQ: IQ) coming this close to a 50% gain in one single day -- up 49.8%.

Does anyone think that now might be a good time to take some profits? Wall Street certainly does. As of 11:05 a.m. ET Thursday morning, Alibaba stock is down 8.3%, iQIYI has lost 14.6%, and Bilibili is down a solid 16%.

So what

And to be clear: Yes, I do believe that what we are seeing today is simple profit taking as investors cash in on yesterday's astounding run. There is, after all, basically no new news on the wires regarding any of these three stocks today -- no analyst upgrades, no press releases from the companies themselves.

Granted, there was some good news yesterday, which sparked the rally.

In China, Vice Premier Liu He announced his intention to ensure Chinese business regulations are more "transparent and predictable" in the future. China's securities regulators say they will also work with the SEC "to cooperate over accounting oversight of U.S.-listed Chinese companies." And in general, China said it plans to be more "supportive" of its foreign-listed companies, says The Wall Street Journal.

In the context of a market that had become exceedingly skeptical of Chinese stocks (I believe one analyst went so far as to call the entire country of China "uninvestable"), all of the above combined to create one gigantic short squeeze, driving Chinese equity prices higher.

Now what

Today, it appears that the momentum provided by that squeeze is spent, and now the worries are returning.

Contrary to what investors may have assumed from yesterday's headlines, Bloomberg reminded investors yesterday evening that the U.S. Public Company Accountability Oversight Board is still "insisting that Beijing provide complete access to audits of Chinese companies that trade in New York." And that sounds less like the PCAOB will negotiate some kind of compromise with its Chinese counterparts, and more like it's setting a "high bar for any deal that allows the firms to maintain their American listings," says Bloomberg.

"The PCAOB must be able to inspect and investigate these audit firms completely [and] all firms auditing public companies must play by the same rules," insisted the PCAOB in a statement. Failing that, each of Alibaba, iQIYI, and Bilibili still face the prospect of being delisted from U.S. stock exchanges.

In the face of this continuing threat, it's hard to see how yesterday's rally could have continued very long in any case. Today's sell-off, I fear, was inevitable. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Why Chinese stocks collapsed again today appeared first on The Motley Fool Australia.

What happened

After days of panic-selling, a wide range of Chinese stocks staged a broad relief rally on Wednesday. Many of the stocks had fallen to 21-month lows, as investors worried about a resurgence of the pandemic in China, an ongoing regulatory crackdown, and the Chinese government's stance on the war raging between Ukraine and Russia. While there wasn't any company-specific news, these stocks came roaring back after government officials vowed to boost economic growth and stabilize the markets. 

Shares of Alibaba Group Holding (NYSE: BABA) gained as much as 27.8%, JD.com (NASDAQ: JD) climbed as much as 33.1%, and Didi Global (NYSE: DIDI) surged as much as 51.1%. The trio were still trading higher, up 26.3%, 30.4%, and 50%, respectively, as of 12:45 p.m. ET. 

So what

China's Vice Premier Liu He, the country's top economic advisor, said Beijing would take substantial steps to "boost the economy in the first quarter," while also introducing "policies that are favorable to the market." The comments came in the wake of a special session of the State Council's Financial Stability and Development Committee. The committee has oversight of China's financial and securities regulators. 

The country has faced numerous headwinds in recent months, which have weighed heavily on investor sentiment and driven Chinese stocks to their lowest level in years. The Nasdaq Golden China Dragon Index, which tracks a collection of popular Chinese stocks, plummeted 12% on Monday alone, its largest one-day decline in more than two decades. The index had also plunged 25% over the previous four trading days, as investors worried about multiple challenges facing Chinese companies. 

In recent weeks, China has been struggling to contain a resurgence of COVID-19 infections, as the number of cases recently topped a two-year high, forcing the country to initiate new, stringent lockdowns. There are restrictions in more than 11 cities and counties in the world's most populous country, including the population centers of Shenzhen and Shanghai, and China has restricted travel and closed non-essential businesses to combat the latest outbreak.

Adding to the uncertainty, U.S. regulators have taken steps to kick a number of Chinese stocks off U.S. exchanges. The Securities and Exchange Commission (SEC) has identified five companies that could be delisted following the passing of legislation that requires Chinese companies to submit their audit records for review by U.S. regulators. 

Finally, news reports from earlier this week suggested that Russia had requested military and financial assistance from China in the wake of the country's war against Ukraine. The U.S. has imposed strict sanctions against Russia in response to the unprovoked invasion, battering its economy. Investors are concerned that a backlash would no doubt ensue if China were to back Russia, whose actions have been condemned by the majority of the free world. 

Now what

The statements by Chinese government officials were welcomed by investors, resulting in more bullish sentiment on Wall Street. 

U.S. Tiger Securities analyst Bo Pei upgraded the China internet sector to outperform (buy) from neutral (hold), positing the sector's biggest ongoing risks are already priced into the beaten-down stocks, which have fallen dramatically in recent weeks and months. Alibaba, JD.com, and Didi Global were all cited in the upgrade. Pei also cited recent reports that suggest regulators from both the U.S. and China have been in talks and are making headway toward finding a mutually agreeable solution to the potential delisting of Chinese stocks from U.S. markets.

The recent headwinds facing Chinese technology stocks may persist, so investors should watch for further developments in these areas. That said, the willingness of China's government regulators to address the situation was welcomed by investors, helping push these stocks up from their recent lows. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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Most weeks, Commonwealth Bank of Australia's (ASX: CBA) brokerage platform CommSec releases the most popular international shares (which are almost always US shares) that its Aussie users were trading over the previous week.

CommSec is one of the most popular brokers in the country. As such, this information gives us a useful insight into the US shares ASX investors are currently finding interesting.

So here are the top 10 US shares from CommSec last week. This week's data covers 30 August to September 3.

Tesla back on top

1. Tesla Inc (NASDAQ: TSLA) – representing 3.2% of total trades with a 57%/43% buy-to-sell ratio.
2. Alibaba Group Holding Ltd (NYSE: BABA) – representing 2.8% of total trades with an 84%/16% buy-to-sell ratio.
3. Apple Inc (NASDAQ: AAPL) – representing 2.5% of total trades with a 71%/29 buy-to-sell ratio.
4. GameStop Corp (NYSE: GME) – representing 2.2% of total trades with an 82%/18% buy-to-sell ratio.
5. Microsoft Corporation (NASDAQ: MSFT) – representing 1.4% of total trades with an 85%/15% buy-to-sell ratio.
6. NVIDIA Corporation (NASDAQ: NVDA)
7. Zoom Video Communications Inc (NASDAQ: ZM)
8. Alphabet Inc Class C (NASDAQ: GOOG)
9. Amazon.com, Inc. (NASDAQ: AMZN)
10. Lucid Group Inc (NASDAQ: LCID)

What can we learn from these trades?

Last week, we discussed the emergence of Chinese e-commerce giant Alibaba into the top spot on this list. Well, this week, Alibaba is still popular, but it's the Elon Musk-headed electric battery and vehicle manufacturer Tesla that takes out the top spot. Although saying that, investors appear pretty divided on what to do with their Tesla shares, seeing as the buy/sell ratio was at 57%/43%.

Tesla has been climbing in recent weeks, going from around US$665 on 17 August to US$753.87 as of last night (up 13.2%). Perhaps some investors are taking some profits off the table here.

But Alibaba is still in the number 2 spot this week and has a far more enthusiastic buy/sell ratio at 84%/16%. The Alibaba share price has continued to fall in recent weeks after a disappointing year in 2021 so far. The company hit a new 52-week low around a fortnight ago, so this might have tempted some bargain hunters to come out of the woodwork.

In other news, we still see sustained demand for the big US tech blue chips like Apple, Microsoft, Amazon, and Alphabet.

Zoom is an interesting addition though. This company has also taken a hit in recent weeks and is down more than 15% since last Monday (30 August). Clearly, we also see some bargain hunting going on here, judging by Zoom's 72%/28% buy/sell ratio.

And finally, we still see an appetite for the 'meme stocks' like GameStop and Lucid Group. Some 82% of trades were buys with GameStop, so there must still be some appetite for the kind of 'pops' this company has now become known for.

The post Here were the most popular US shares for ASX investors last week appeared first on The Motley Fool Australia.

Aussie investors tended to stick almost exclusively with the ASX listed stocks. But that picture has changed drastically.

These days its easier than ever to find up to date information on international shares. And the fees for investing in overseas companies have come way down, even over the past few years.

A look at the top-10 list of most popular traded shares in August among Saxo Capital Markets' Australian clients reveals that 4 of them are, in fact, international shares.

Four top international traded shares

We start off with Tesla Inc (NASDAQ: TSLA), the seventh most popular traded share overall among Saxo's clients in August.

Saxo says that Aussie retail investors are drawn by Tesla's founder Elon Musk as he pushes ahead with innovative next generation vehicles. And Tesla's potential to expand into the massive Indian market has increased local interest in the company.

According to Saxo, "India is considered one of the world's fastest emerging car markets and if Tesla can partner with auto parts suppliers within the country, it could make huge inroads."

The Tesla share price is up 106% over the past 12 months.

Moving on, the fifth most popular overall share and third most popular traded international share for August was Alibaba Group Holding Ltd (NYSE: BABA).

The Chinese e-commerce giant (listed on US and Hong Kong exchanges) has struggled as it's come under scrutiny from Chinese regulators over intellectual property violations. Alibaba's share price is down 38% over the past year and down 13% over the past month.

Given the share price falls, Saxo notes:

The retail giant's price-to-earnings ratio stands currently at 19.25, which is some way short of its 2020 high of 42.85. All these signs would suggest that the Alibaba stock is undervalued and has the potential to rebound, but the uncertain August has seen question marks linger over the corporation's ability to withstand regulatory reforms.

Which brings us to the fourth most popular overall and second most popular international traded stock, Apple Inc (NASDAQ: AAPL).

Aussie investors are drawn to Apple in part because it's a globally recognised household name. It's also been charging higher, with shares up 32% over the past 12 months. And that's based on solid fundamentals.

As Saxo notes, "Its last quarterly earnings once again surpassed expectations, registering US$81.41 billion in revenue and an impressive profit of $1.30 per share."

Saxo also offered these words of caution:

In the weeks and months ahead, retail traders should keep a close eye on Apple's legal headwinds. The operator's App Store has come under legal scrutiny for failing to provide a "free and fair marketplace" for its app developers, according to Tennessee Senator Blackburn.

And finally, the second most popular overall and most popular traded international share among Saxo's clients in August was…drum roll please…Amazon.com, Inc. (NASDAQ: AMZN).

If you never bought anything from the e-commerce giant before the pandemic lockdowns, there's a fair chance you have by now.

A global operator, Amazon has been making rapid inroads Down Under. And that growth looks set to continue.

Saxo notes, "Amazon's Australian trading arm has been tipped to experience exponential growth in 2021… Its latest AU$500 million centre in Sydney will deliver the latest in robotics and automation, cementing a state-of-the-art logistics hub in the Emerald City."

The Amazon share price has gained 8% over the last 12 months.

Foolish takeaway

There are loads of great companies trading on the ASX. And it makes sense for most Aussie investors to hold ASX shares in their portfolios.

But that doesn't mean international shares should be ignored. Investing outside the ASX can help diversify portfolios and offer access to companies you just won't find listed in Australia.

While there are added risks to consider, like currency fluctuations, it's worth taking some time to look into the potential opportunities of leading international shares.

The post Leading broker unmasks 4 top traded international shares appeared first on The Motley Fool Australia.

Broker Saxo Markets has just released its 10 most popular traded shares on its platform over August 2021. And it makes for some interesting reading.

So, here are the 10 shares that were the most popular and traded on Saxo Markets over August. They include both ASX and US shares, giving a pretty well-rounded view of what Aussie investors were finding interesting over the month just passed.

Saxo's 10 most popular shares for Aussie investors

10 – A2 Milk Company Ltd (ASX: A2M)

Ah A2 Milk… It's no secret that this dairy company has had a year it would rather forget in 2021 so far. Not only did A2 spend most of the year downgrading its FY21 earnings guidance, but it also delivered a poorly-received FY21 earnings report last month. Saxo reckons it was how A2 "lost its sparkle" in 2021 that kept it on this list.

9 – Pilbara Minerals Ltd (ASX: PLS)

Pilbara has been one of the standout ASX 200 performers in 2021 so far. This lithium producer is up close to 150% year to date in 2021 so far. Saxo says that its "hugely promising" FY21 earnings report last month really got ASX investors going with this one. In particular, Pilbara's anticipation of a "further rise in shipments for FY22".

8 – Zip Co Ltd (ASX: Z1P)

Buy now, pay later company Zip is next up at the number 8 position. Saxo tells us that "many of our retail clients have been drawn to the decline in the Zip Co share price, which has plunged by a third in the last six months".

It also points to how Zip was one of the most shorted ASX shares over August, as well as its FY21 results which Saxo calls " less than impressive compared with its long-time competitor [Afterpay Ltd (ASX: APT)]".

7 – Tesla Inc (NASDAQ: TSLA)

And we have our first US share here, electric vehicle and battery manufacturer Tesla. Saxo reckons it is Tesla's potential move into the Indian market that have been exciting investors over August, saying "India is considered one of the world's fastest emerging car markets and if Tesla can partner with auto parts suppliers within the country, it could make huge inroads". Even though the Tesla share price remains infamously volatile, it is still up more than 33% over the past 6 months.

6 – Qantas Airways Ltd (ASX: QAN)

Another ASX share for the number 6 spot, we have the Flying Kangaroo. ASX investors' affections for Qantas are well-known. The airline is the national carrier after all.

Saxo is confident that it was Qantas' FY21 earnings report from last month that really got investors in the mood for flying. It said that "investors were able to look beyond the headline figures and delve deeper into the balance sheet" with Qantas, noting how the company still has "impressive liquidity".

5 – Alibaba Group Holding Ltd (NYSE: BABA)

Alibaba is a Chinese company but is listed on the New York Stock Exchange. This e-commerce giant has been attracting headlines lately due to the sharp sell off we have seen over the past few months. Alibaba shares remain down more than 23% year to date, mostly due to concerns over the Chinese regulatory environment at the moment.

According to Saxo, these woes have "helped capture the imagination of bearish retail traders". It also points out that the company is trading at around "half the value of its historic peak" from October 2020. No wonder it was getting some love from ASX investors.

4 – Apple Inc (NASDAQ: AAPL)

Everyone knows Apple. So it's probably no surprise that this tech giant also makes this list. Saxo highlights that Apple "is part of an exclusive club of stocks that simply garners interest from retail traders purely because of its name".

The broker points to its recent healthy earnings report as well as its continual share price growth over the past few month. These factors have culminated in a series of new all-time highs recently, generating enthusiastic support for Apple from Aussie investors.

3 – BHP Group Ltd (ASX: BHP)

Finally, another ASX share. We already mentioned BHP as one of the ASX's most popular shares and now we have it in writing.

Saxo points to BHP's announcement last month that it would cease its dual listing on the London Stock Exchange and 'come home' for good as a major driver of client interest here. It also highlights BHP's recent earnings report which contained record dividend payments, as well as plans to divest its petroleum assets, as major catalysts here.

2 – Amazon.com Inc (NASDAQ: AMZN)

If you thought we weren't going to hit Amazon on this list, stand corrected. Yes, this e-commerce giant makes the number 2 spot today. Saxo says that "Amazon's Australian trading arm has been tipped to experience exponential growth in 2021" after laying down the groundwork in Australia for several years.

Saxo seems to argue that it's Amazon's growing presence down under that may be behind its enduring popularity with ASX investors. That's as well as its eye-watering growth numbers and profitability of course.

1 – Fortescue Metals Group Limited (ASX: FMG)

And last, but certainly not least, we have the giant ASX 200 iron ore miner Fortescue. Saxo said the following on its number one share for August:

The undisputed number-one stock our clients wished to trade in August 2021 was FMG – and it's not surprising when you consider it recently revealed its annual profits more than doubled. The outcome for FMG shareholders was a record-high dividend of AU$2.11, which represented a 17% yield underpinned by healthy iron ore prices.

Saxo also points to Fortescue's focus on 'green iron ore' and hydrogen power may also be attracting some investor attention. But given Fortescue's wild ride over 2021 so far, it's perhaps no surprise that this company took out the top spot for August over at Saxo.

The post Leading broker reveals why these 10 big-name shares have been firing up its clients appeared first on The Motley Fool Australia.

While there are plenty of great companies listed on the ASX, they only represent a tiny fraction of the global stock offering.

So it pays to take some time to investigate the potential risks and rewards offered by international shares.

While there are added risks with investing overseas – exchange rate fluctuations chief among them – international shares can help diversify your portfolio from issues likely to predominantly impact Aussie companies.

The potential rewards offered by international shares has certainly been reflected in the past financial year's investment allocations by Austalia's superfunds.

As the Australian Financial Review notes, FY21 saw a record $130 billion of Aussie capital invested into global exchanges.

According to Robert Rennie, senior strategist at Westpac Banking Corp (ASX: WBC), a record share of the $450 billion increase in FY21's super assets was invested in international shares.

"In effect, 28 cents in every dollar placed in super went into foreign equity. That takes foreign assets relative to domestic assets to 19.4%, which is the highest on record," he said.

With that in mind, Josh Gilbert, market analyst at global online investment platform eToro, outlines 2 exciting international shares to consider.

Global share number 1

The first international share Gilbert recommends is Crowdstrike Holdings Inc (NASDAQ: CRWD).

Crowdstrike counts among the world's largest cybersecurity companies.

Gilbert points to United States President Joe Biden's May 2021 executive order to beef up the nation's cybersecurity measures as likely to offer significant tailwinds for the company moving forward:

Crowdstrike, is expected to reap the rewards of Joe Biden's plans. The company is growing at an exceptional rate, with 70% year-over-year revenue growth in its Q2 earnings, whilst adding over 1,660 customers, up 81%. Crowdstrike also raised guidance for Q3 and the full-year, with both coming in above analyst expectations.

As many global businesses continue to upgrade their cybersecurity systems, and enterprises move more work to the 'cloud' than ever before, cybersecurity spending is expected to top US$200 billion by 2024.

The Crowdstrike share price is up 36% in 2021.

International share number 2

Another overseas share Gilbert tips is Alibaba Group Holding Ltd (NYSE: BABA).

The Chinese multinational technology company, co-founded by billionaire Jack Ma, has struggled this year. Shares are down 25% in 2021 amid increased red tape from the Chinese government.

Despite this, however, Gilbert says, "Alibaba's fundamentals remain strong, with a positive earnings report at the start of August 2021, announcing US$2.57 per share on US$31.85 billion in revenue."

Additionally:

Alibaba reported a significant increase to its share buyback program, increasing by 50% to US$15 billion. This essentially means Alibaba feels the stock is undervalued and expects further growth in the share price.

Alibaba's valuation is close to historic lows, trading at a forward P/E ratio of 17.37, lower than value stocks such as Home Depot and Target. This essentially opens an exciting opportunity for investors looking for a bargain. Of course, there will be ongoing risks with Chinese stocks, but adopting a dollar cost averaging strategy can help investors navigate the volatility on a stock that's undervalued.

The next time you're looking at adding to your investment portfolio, don't ignore the ASX.

But you may want to balance the potential risks and rewards offered by international shares as well.

The post Two exciting international shares to consider as superfunds hit record global investments appeared first on The Motley Fool Australia.

Most weeks, Commonwealth Bank of Australia (ASX: CBA)'s share trading service CommSec tells us the most popular US shares that its Australian user base has been buying and selling over the previous week.

Since CommSec is one of the most widely used brokers in Australia, this trading data gives us an interesting window into what kinds of US shares Aussie investors are taking a closer look at.

So here are the top 10 US shares from CommSec last week. This week's data covers 23-27 August.

Alibaba shoots to the top of the pile

1. Alibaba Group Holding Ltd (NYSE: BABA) – representing 3.9% of total trades with an 86%/14% buy-to-sell ratio.
2. Tesla Inc (NASDAQ: TSLA) – representing 3.2% of total trades with a 65%/35% buy-to-sell ratio.
3. GameStop Corp (NYSE: GME) – representing 2.9% of total trades with a 78%/22% buy-to-sell ratio.
4. Apple Inc (NASDAQ: AAPL) – representing 2.7% of total trades with a 74%/26% buy-to-sell ratio.
5. Microsoft Corporation (NASDAQ: MSFT) – representing 1.9% of total trades with an 86%/314% buy-to-sell ratio.
6. Pfizer Inc (NYSE: PFE)
7. NVIDIA Corp (NASDAQ: NVDA)
8. Amazon.com, Inc. (NASDAQ: AMZN)
9. AMC Entertainment Holdings Inc (NYSE: AMC)
10. Alphabet Inc Class C (NASDAQ: GOOG)

What can we learn from these trades?

Chinese e-commerce giant Alibaba has shot to the top of the pile as CommSec's most popular share last week. The Chinese behemoth behind Alipay, AliExpress, and Ant Financial took home a total of almost 4% of all CommSec international trades last week.

It even pipped the perennially popular Tesla, the electric car and battery manufacturer helmed by Elon Musk. What's more, an overwhelming majority of 86% of all trades were on the buy side.

It's not hard to see why ASX investors might have suddenly developed an appetite for Alibaba shares. This company has been on a steep decline all year, losing around 24% of its value over 2021 so far. Alibaba is also down more than 44% from its all-time high from October last year. It seems a number of Australian investors are sensing a bargain buy here.

In other news, we still see enduring demand for shares like GameStop and AMC, long held up as examples of 'meme stocks'. GameStop shares are now up almost 40% over just the past fortnight, so it's easy to see where this optimism is coming from.

We also see continuing interest in the big tech blue-chip shares like Apple, Microsoft, Amazon, and Google-parent Alphabet. These companies have generally been hitting new all-time highs of late, but that's nothing new for the FAANGs.

Finally, it's interesting to see vaccine maker Pfizer here too. With 86% of trades on the buy side, it seems some investors may be so inspired by a recent vaccine that they have been compelled to invest in the company too.

The post ASX investors were buying Alibaba, Pfizer shares last week appeared first on The Motley Fool Australia.

China's all-powerful Communist Party government has spent 2021 cracking down on several industries that it feels threaten the long-term welfare of the country. Just last month, we saw billions wiped from the valuations of several Chinese companies operating in the education space.

As we reported at the time, this was due to regulatory changes that are forcing these companies to reorganise as not-for-profit entities.

China shares face government crackdowns

We also saw a recent crackdown on the Chinese ride-sharing company DiDi Global Inc (NYSE: DIDI). This may have been the primary catalyst behind the company losing around 42% of its value since its June IPO.

This follows the clamps being put on one of China's largest companies – Alibaba Group Holding Ltd (NYSE: BABA) – last year. Alibaba was planning on spinning off its Ant Financial division at the time. But it was forced to pull the plug at the last minute after intervention from Chinese authorities.

All of these heavy-handed moves by the Chinese Communist Party have seen a plethora of investors lose faith in China shares. Not just the ones directly affected by the actions of the Chinese government either.

The BetaShares Asian Technology Tigers ETF (ASX: ASIA) is an exchange-traded fund (ETF) that holds a basket of mostly Chinese tech shares. These not only include Alibaba and DiDi. It also includes other famous China shares like Tencent Holdings Ltd (HKG: 0700), Baidu Inc (NASDAQ: BIDU) and JD.com Inc (NASDAQ: JD).

The ASIA ETF was one of the best performing ASX ETFs of 2020. But, in 2021 so far, it's down a nasty 12.8%. It's also down close to 30% from its February all-time high.

Future Fund pulls the plug on China

Well, now we have some confirmation that it's not just retail investors with paper hands. According to a report in the Australian Financial Review (AFR) last week, a larger investor has taken note.

That investor is none other than Australia's sovereign wealth fund – the Future Fund. The result? The Future Fund is bailing out of China shares.

Future Fund chair Peter Costello told the AFR that the Future Fund needs to be careful with "sovereign money" in light of "recent circumstances" with China. Here's some of what the former Treasurer said:

China is a big part of the emerging world and ordinarily we would be taking a big position in relation to that… But given the difficulty in the relationship between Australia and China we have pulled back on allocation in China… We think it's wise to be cautious as Australia's sovereign [fund], when we're making the allocations in this difficult political climate.

The AFR reports that the Future Fund had China shares Alibaba and Tencent as its sixth and seventh largest positions as of 30 June. Both positions were reportedly worth more than $1 billion together. But in light of Mr Costello's comments, we can probably assume these positions have been at least pruned.

Mr Costello's comments seem to put the blame for this shift in preference for China shares to the recent well-publicised diplomatic spats between Australia and China. Even so, it's possible that the recent tectonic shifts in China's regulatory environment may have helped to grease the wheels.

Whatever the reason, Australia's sovereign wealth fund is a lot less invested in China shares than it was just a few months ago. Food for thought!

The post Why is the Future Fund bailing out of China shares? appeared first on The Motley Fool Australia.

CommSec is one of the most popular brokers in Australia. Because of this, CommSec's trading data gives us a useful insight into the US shares that ASX investors are finding interesting right now. 

So here are the top 10 international shares that CommSec-ers were trading last week. This week's data covers 2-6 August.

Robinhood and Square make their presence known to ASX investors

1. Tesla Inc (NASDAQ: TSLA) – representing 3.7% of total trades with a 60%/40% buy-to-sell ratio.
2. GameStop Corp. (NYSE: GME) – representing 2.9% of total trades with a 93%/7% buy-to-sell ratio.
3. Amazon.com, Inc. (NASDAQ: AMZN) – representing 2.5% of total trades with an 86%/14% buy-to-sell ratio.
4. Apple Inc (NASDAQ: AAPL) – representing 2.4% of total trades with a 65%/35% buy-to-sell ratio.
5. Robinhood Markets Inc (NASDAQ: HOOD) – representing 1.9% of total trades with a 72%/28% buy-to-sell ratio.
6. Square Inc (NYSE: SQ)
7. AMC Entertainment Holdings Inc (NYSE: AMC)
   
8. Advanced Micro Devices, Inc. (NASDAQ: AMD)
9. Moderna Inc (NASDAQ: MRNA)
10. Alibaba Group Holding Ltd (NYSE: BABA)

What can we learn from these trades?

We see some interesting movements in this week's list. Firstly, it's worth noting that the perenially popular shares of Tesla and GameStop remain at the top of this pile, cementing a trend we have pretty much seen all year. Investors remain super-bullish on these two companies as well, in particular with GameStop. A staggering 93% of all GameStop trades on CommSec last week were on the buy side, despite the fact that this original 'meme stock' has slid around 15% over the past month or so.

Tesla also remains popular, albeit less so than GameStop. Tesla shares are up roughly 10% since the start of the month, which may be influencing trading activity here.

But turning to other news, and it was interesting to see e-commerce giant Amazon climb into the top 5 shares this week. Amazon is a regular feature on this list, but usually occupies a spot at the bottom of the table when it does turn up. Perhaps a rare share price pullback in Amazon shares (the company is down more than 10% over the month just passed) is to thank for this.

We also see a strong appetite for US share market newcomer Robinhood. Robinhood had an explosive IPO late last month, rising from around US$35 a share to US$85 by last Wednesday. The company is back down to the mid-US$50 range as it stands today.

And finally, it's also worth noting the presence of Afterpay Ltd's (ASX: APT) potential new overlord Square. Like Amazon, Square is a company that has turned up at the bottom of this table before, but its new presence in the ASX investor's mind looks to have boosted its profile. Square's commitment to list on the ASX if its acquisition of Afterpay goes through may also be at play here.

The post ASX investors were buying Robinhood, Square shares last week appeared first on The Motley Fool Australia.

China shares have been a hot topic for investors over the past month. One of the most popular stocks is Tencent Holdings Ltd (SEHK: 0700), which is currently valued at about A$744 billion.

There are, however, some risks that come with investing in China shares like Tencent. One such risk is government intervention – something that Magellan Financial Group Ltd (ASX: MFG) chairman Hamish Douglass is well accustomed to.

The esteemed fund manager's Global fund counted Chinese tech titans Alibaba Group Holdings (NYSE: BABA) and Tencent as its sixth and eighth-largest holdings. At the end of June, the two companies combined made up 9.3% of the fund's allocation.  

Dark cloud of uncertainty

If there is one thing investors don't like, it's uncertainty. The more unknown and uncontrollable variables, typically the more risk. In the case of companies at the peril of China state intervention, this risk has been manifested into reality more recently.

Earlier in the week, shares in Tencent tumbled as a state-owned newspaper described video games as "spiritual opium". The remarks prompted Tencent shareholder concern about tighter regulations on the industry. Indeed, investors shot first and asked questions later as shares in the China-based company swiftly fell more than 10% on the news.

However, Tencent is not alone in its receipt of capitalistic criticisms recently. July bared witness to the demolition of the newly listed ride-sharing company, DiDi. The part celebratory listing antics were short-lived with China bringing down the hammer on the company over alleged customer data misuse.

Fuelling further fears, the Chinese government then went on to announce a crackdown on for-profit tutoring companies. A move said to be an effort in getting a hold on the increasing costs of education in the country.

Long-term vision for China shares

While the pressure mounted against Mr Douglass and his fund's large weighting towards such investments, the prolific investor remained steadfast to his thesis. Specifically, Douglass continues to be optimistic about the lifting of Chinese middle-class incomes for the next 20 years.

A message that investing great Ray Dalio seems to also be reverberating. In a recent LinkedIn post, Dalio said:

To understand what's going on you need to understand that China is a state capitalist system, which means that the state runs capitalism to serve the interests of most people and that policymakers won't let the sensitivities of those in the capital markets and rich capitalists stand in the way of doing what they believe is best for the most people of the country.

The post What are the risks of investing in China shares like Tencent? appeared first on The Motley Fool Australia.

ASX share investors have been watching the US$1 trillion stock rout triggered by China's war on tech companies from the safety of fortress Australia.

But distance may not provide much protection as the re-writing of China's economic rulebook could hit us where it hurts.

At first blush, Australian investors are just relieved. Most of us have little or no exposure to Chinese tech companies listed in the US.

Share meltdown of China tech companies yet to infect the ASX

China is using a big regulatory stick on its home-grown tech titans that have chosen to cosy up to foreign investors. The vicious sell-off in the DiDi Global Inc – ADR (NYSE: DIDI) share price, Alibaba Group Holding Ltd – ADR (NYSE: BABA) share price and Tencent Holdings ADR (OTCMKTS: TCEHY) share price says it all.

Thank goodness China's arms can't quite reach our tech darlings like the Afterpay Ltd (ASX: APT) share price, Xero Limited (ASX: XRO) and WiseTech Global Ltd (ASX: WTC) share price.

Fallout from China's war on its tech shares

But the Asian giant's expanding war on companies to include education should ring warning bells for ASX shares. It shows that China is not done with its attempts to stamp its authority on everything within its expansive borders.

There are reports that US and other foreign investors are spooked. They are contemplating pulling up stumps and will sell all Chinese assets in their portfolio. This includes equities, bonds, credit and other assets.

No one knows where the next battle front will be, and what makes this war scarier is that it's driven by politics, not economics.

Has China become uninvestable?

China has shown its happy to cut its nose to spite its face, and that could make the country uninvestable.

This comes at a time when our largest trading partner overtook the US as the number one destination for new foreign direct investment in January this year.

Xi Jinping might be regrowing the bamboo curtain to ringfence his country. But this is no longer Mao Zedong's China. The country is too integrated with global markets these days and it needs foreign capital to grow.

ASX shares could soon feel the heat

This is where China's expanding war on tech can bite ASX shares. If China's growth declines, we will feel it in just about every part of our economy.

It's not just the BHP Group Ltd (ASX: BHP) share price, Rio Tinto Limited (ASX: RIO) share price and Fortescue Metals Group Limited (ASX: FMG) share price that will hit the skids.

Foolish takeaway

It brings some comfort that the Chinese authorities have reached out to international investors to calm fears.

But in unpredictable China, global investors may be tempted to sell first and ask questions later. China is unlikely to stop at just two sectors.

As for ASX investors, don't get too comfortable watching this sideshow from afar.

The post How China's war on tech companies can hit ASX shares where it hurts appeared first on The Motley Fool Australia.

Now, most China shares are not listed on the ASX, instead finding homes on the US, Hong Kong or Shanghai stock exchanges.

But let's take an ASX China barometer in the BetaShares Asia Technology Tigers ETF (ASX: ASIA). This exchange-traded fund (ETF) is one of the top ETFs on the ASX. It holds within it most of the famous Chinese e-commerce companies in Tencent Holdings Ltd (HKG: 0700) and Alibaba Group Holdings Ltd (NYSE: BABA). As well as JD.com Inc (NASDAQ: JD) and Baidu Inc (NASDAQ: BIDU).

Since topping out at $14.36 a unit back in February, this ETF is now down to $9.76 on current pricing. That's a pretty steep fall of more than 30%.

Looking at some of the individual shares listed above and things look even worse. The Tencent share price is down more than 42% from its 52-week high. JD and Alibaba aren't too far behind, while Baudi is out in front, down more than 53% from its February peaks.

So what's going on here?

China shares face CCP wrath

Well, according to a report in the Australia Financial Review (AFR) today, it's the Chinese government that is largely to blame. The Chinese Communist Party (CCP) has reportedly been executing a crackdown on several industries in China. Most prominantly education and tech companies.

The CCP is forcing certain educational businesses to reorganise as not-for-profit groups. It has also banned them from raising capital on the private markets. Further, the government is also bringing in more regulation, including new rules for delivery drivers.

This follows an incident last year, which saw Alibaba ditch a float of its financial division Ant Group. This also saw Alibaba founder Jack Ma retreat from public life after making comments that some interpreted as critical of the central government.

The report also states that the CCP wasn't too happy with the IPO of Chinese ridesharing company DiDi Global Inc (NYSE: DIDI) last month. This reportedly went ahead, even though "Chinese regulators recommended a delay".

Here's what the report stated happened next:

This insubordination was quickly punished. Days after it went public, China's internet regulator ordered Didi to undergo a cybersecurity review, and banned the road-hailing group from accepting new users.

DiDi shares are now trading for less than half of what they were on the company's first day of trading.

Overall, it seems that the CCP is putting its own control of China's largest companies ahead of what might be good for the short-term (and perhaps medium or long term) share market performance of its largest companies.

This is probably something that every ASX investor with an interest in China shares should pay attention to.

The post What's gone wrong with China shares like Tencent lately? appeared first on The Motley Fool Australia.

CommSec is one of the most widely used brokers in Australia. Because of this, this data can give us a valuable window into the US shares that ASX investors are finding enticing. So here are the top 10 US shares that CommSec-ers were buying and selling last week. This week's data covers 12-16 July.

Nothing can keep GameStop down

1. GameStop Corp. (NYSE: GME) – representing 3.3% of total trades with an 89%/11% buy-to-sell ratio.
2. Apple Inc (NASDAQ: AAPL) – representing 3.2% of total trades with a 72%/28% buy-to-sell ratio.
3. Tesla Inc (NASDAQ: TSLA) – representing 2.9% of total trades with a 61%/39% buy-to-sell ratio.
4. AMC Entertainment Holdings Inc (NYSE: AMC) – representing 2.5% of total trades with a 65%/35% buy-to-sell ratio.
5. Virgin Galactic Holdings Inc (NYSE: SPCE) – representing 1.6% of total trades with a 49%/51% buy-to-sell ratio.
6. NVIDIA Corporation (NASDAQ: NVDA)
7. Microsoft Corporation (NASDAQ: MSFT)
8. Amazon.com, Inc. (NASDAQ: AMZN)
9. Nio Inc. (NYSE: NIO)
10. Alibaba Group Holding Ltd (NYSE: BABA)

What can we learn from these trades?

That the meme is strong for one. Yes, 'meme stock' king GameStop is back at the top of this pile, displacing the giant Apple as well as perennial ASX favourite Tesla. Even more interestingly, 89% of GameStop trades last week were in the 'buy' column.

This coincides with GameStop shares hitting their lowest level since May recently. Clearly, there are more than a few investors hoping for another one of those lucrative 'pops'.

We see a less-enthusiastic commitment to other meme stocks like AMC, Nio and Virgin Galactic. Although, in saying that, Virgin Galactic investors appear to be more inclined to bail out than buy more, with 51% of trades in the 'sell' column.

Ever since Sir Richard's successful space flight earlier this month, investors have been stampeding to the exits. Since 8 July (3 days before the flight), Virgin Galactic shares have lost more than 38% of their value. Imagine what would have happened if it wasn't a successful flight!

We still see bubbling affection for the US big tech blue chips like Apple, Amazon and Microsoft. Apple in particular maintains a dominant position in this week's numbers, even pipping Tesla with its 72% 'buy' bias.

This week's report also marks the return of chipmaker NVIDIA after a few weeks' absence. NVIDIA has been on an exceptional run lately, rising roughly 50% between 13 May and 6 July. That's a pretty significant move from what is now a company with a market capitalisation of US$468 billion.

The post ASX investors were buying GameStop (NYSE:GME) shares last week appeared first on The Motley Fool Australia.

So what's happening with the growth versus value debate? Is long-lasting inflation still a worry?

The market has been grappling with those questions all year, and we're no closer to any answers as July quickly runs out.

But what if there were stocks that were both growth and value? Wouldn't that save investors immense headaches from trying to predict inflation and interest rates?

According to Montaka chief investment officer Andrew Macken, the answer was right in front of us the whole time.

"There is no doubt that the world's annual $120 trillion economy increasingly depends on just 6 mega-tech businesses to function properly," he wrote on a company blog.

"You would think they would continue to all be obvious inclusions in portfolios."

The businesses he refers to are Alphabet Inc (NASDAQ: GOOGL), Microsoft Corporation (NASDAQ: MSFT), Amazon.com, Inc. (NASDAQ: AMZN), Facebook Inc (NASDAQ: FB), Tencent Holdings Ltd (HKG: 0700) and Alibaba Group Holding Ltd (NYSE: BABA).

"Investors shouldn't rotate out of mega-tech to value because mega-tech are value," said Macken.

"For the patient investor who can look through the short-term noise, the rewards will be substantial."

Haven't tech shares had a pretty good run already?

Macken acknowledged many investors would think the massive technology companies have already had their big run.

"After a strong 2020, many investors are worried all the 'easy money has been made' – a commonly used phrase we hear in our industry (which also suffers from acute hindsight bias)."

Investors are also worried about higher interest rates, he admitted, and the compression on earnings multiples that would have on growth stocks.

Then there are the qualitative worries.

"Mega-tech investments also seem boring now – a surprisingly strong criterion some investors seek to avoid," Macken said.

"And, of course, there are the never-ending headlines pointing to regulatory pressures across the sector."

But contrary to perception, technology shares have underperformed this year so far, according to Macken.

"Our analysis shows that mega-tech stocks not only offer some of the best growth opportunities, but also offer some of the best 'value' opportunities in the market today," he said.

"We see material upside in all 6 of these mega technology businesses. Given the combination of strong and growing advantages, enormous growth opportunities, and material undervaluation today, we believe these names should form – or continue to form – the core of any global equities portfolio."

Macken cited 3 reasons why he thinks these massive companies should be counted as value.

Mega-techs are the best businesses in human history

The fund manager is glowing about the quality of the 'big 6' tech shares.

"The business quality of today's mega-techs is among the highest that humans have ever created," he said.

"They dominate global data, benefit from enormous ecosystems, and have superior economics and scale."

The massive cash flows the mega-caps make can be ploughed back into the business to search for new opportunities.

"These mega-techs all have a vast array of high-probability growth options in enormous new TAMs (total addressable markets)."

He took cloud computing as an example.

"For the leading cloud providers, their advantages in scale, data and customer captivity will only continue to strengthen over time," said Macken.

"Said another way, this is a space for which enormous growth is largely assured and for which the winners have already been defined today. This means that the future revenues and earnings power of these businesses will also be multiple of their current levels."

Inflation worries are overblown

Macken simply doesn't share in the fears of other investors when it comes to the prospect of higher inflation.

"While we note the same strong headline inflation numbers as everyone else, we struggle to see an extended acceleration in core inflation," he said.

"We… expect structural disinflationary forces – such as aging populations, labour-disrupting automation technologies and global corporate and government indebtedness – to persist for decades."

Besides, even if prices went up, these 6 giants could have enough market power to simply charge more.

"We believe the latent pricing power in these businesses is likely very strong – and in some cases, extraordinarily so," he said.

"Take Microsoft 365, for example… This costs just US$32/month, vastly below any reasonable estimate for the value it adds, strongly supporting our latent pricing power hypothesis."

Current valuations for these tech shares are underdone

Macken's team has calculated that future expectations priced into the current tech shares are too conservative.

He took the example of the 3 US players that provide cloud infrastructure. Consensus estimates for their collective cloud revenues by 2030 are "in the order of just US$650 billion" more than current levels.

"This is a tiny fraction of the US$8 trillion increment that Microsoft CEO Nadella expects to accrue to the tech space over the next decade," said Macken. 

"If Nadella's forecast above is even remotely accurate, then these cloud providers will see much higher revenues (and earnings) in 2030 than what is currently being implied by consensus estimates."

And the valuation of Facebook alone, with a forward price-to-earnings ratio of just 14, has Macken absolutely puzzled.

"Some of the businesses trading at a higher multiple than this today include Australia's Wesfarmers Ltd (ASX: WES), Scentre Group (ASX: SCG), and plumbing parts supplier, Reece Ltd (ASX: REH)," he said.

"At the current stock price, the market is effectively giving investors all of the upside from eCommerce, the monetisation of the creator economy, WhatsApp, Messenger and Reels, as well as Facebook's growth in VR/AR for free!"

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