Investors shrugged off the three-day government shutdown that ended on Monday, January 22nd, and strong corporate earnings helped the stock market build momentum and appreciate despite a couple of minor declines in intraday trading on Wednesday and Thursday of the same week. On Wednesday, January 24th, the US Commerce Secretary Wilbur Ross, speaking at the World Economic Forum in Davos, hinted that US trade authorities might take action against China’s infringement of intellectual property. The following day, President Donald Trump told CNBC in an interview from the Davos event that the dollar will get “stronger and stronger” under his leadership, which contradicted the earlier remarks of Treasury Secretary Steven Mnuchin, who said that he welcomed a weaker greenback and whose comments sent the dollar to its lowest level in three years on Wednesday.
Investors also took notice of key economic data on Friday, January 26th, as the Commerce Department said that the economy grew by 2.6% during the fourth quarter, lower than economists’ expectations of a 3% gain. Nevertheless, the Dow Jones Industrial Average and the S&P 500 hit all-time highs on Friday, with Dow Jones also reaching an intraday record and S&P 500 registering its biggest one-day gain since March 1, 2017. The Nasdaq Composite had its best trading day since January 2 and also reached a record high. In this way, major indexes gained more than 2% between January 22 and January 26 and ended the week at record highs, driven by strong earnings.
The fourth-quarter earnings season is shaping up to be a very good one. According to FactSet, with 24% of the S&P 500 companies having reported their results by January 25, 76% of the companies posted better-than-expected EPS figures and 81% of the companies beat revenue estimates. Both EPS and sales surprises figures are above the five-year averages. Across sectors, Energy, Health Care, Real Estate and Telecom Services sectors had all companies that reported their results so far beat the sales expectations. At the same time, all companies in the Energy and Utilities sectors that reported their results posted EPS surprises.
In the meantime, Financial Advisors seem to be continuing to ignore the earnings season judging by the list of the 20 most searched tickers compiled by TrackStar, InvestingChannel’s official newsletter capturing and analyzing the trends of Financial Advisors. The list of 20 most-searched tickers between January 21 and January 27 showed NVIDIA Corporation (NASDAQ:NVDA) maintaining its top position for the second week straight and followed by nano-cap WPCS International Incorporated (NASDAQ:WPCS) and microcap ITUS Corp (NASDAQ:ITUS), which registered big price swings that are not uncharacteristic for small stocks. The list of the top five most searched tickers was rounded up by Equifax Inc. (NYSE:EFX) and Apple Inc. (NASDAQ:AAPL).
In this article, we are going to take a closer look at Alibaba Group Holding Ltd (NYSE:BABA), which was the eighth most-searched ticker last week. The week before, the stock ranked on the 19th spot and it was the first time it made the list of the most searched tickers since the beginning of December.
Alibaba Group Holding Ltd (NYSE:BABA)’s stock is up by 17% since the beginning of the year and it almost doubled over the last 12 months. Last week, two analysts raised their price targets on the company’s stock. On Thursday, China Renaissance boosted its target on Alibaba Group Holding Ltd (NYSE:BABA)’s stock by $30 to $230 with a ‘Buy’ rating and the following day KeyBanc reiterated its ‘Overweight’ rating and increased the price target also to $230 from $210. Both analysts raised their price targets a couple of days ahead of the company’s financial results scheduled for February 1. The consensus estimates for the Chinese eCommerce giant’s results include EPS of $1.67 and revenue of $12.55 billion.
In addition, last week Bloomberg reported that Alibaba Group Holding Ltd (NYSE:BABA)’s rival JD.Com Inc (ADR) (NASDAQ:JD) is preparing to enter the US market, where it would challenge Amazon.com, Inc. (NASDAQ:AMZN). Alibaba Group Holding Ltd (NYSE:BABA) has presence in the US through data centers for its cloud business, but its retail segment has been mostly home-bound and the company has been focusing on expanding its presence in the brick-and-mortar space in China through the acquisition of a 36% stake in big box retailer Sun Art and supermarket chain Hema.
Additionally, with competition in the US grocery business intensifying with Wal-Mart Stores Inc (NYSE:WMT) making several important moves, including stepping up its home delivery services and Amazon.com, Inc. (NASDAQ:AMZN) buying Whole Foods last year, Alibaba Group Holding Ltd (NYSE:BABA) might be eyeing the US market, though the chances are slim. Last week, Reuters and The New York Post reported that supermarket chain Kroger Co (NYSE:KR) and Alibaba Group Holding Ltd (NYSE:BABA) had had discussions regarding a potential partnership. However, the talks are still in early stages. Last week, Amazon.com, Inc. (NASDAQ:AMZN) opened its first cashier-less store, Amazon Go, in Seattle. Alibaba Group Holding Ltd (NYSE:BABA) is testing technology that allows cashier-less stores in China and reports highlighted that Kroger Co (NYSE:KR) could implement this technology in its stores. However, some investors are speculating about more involvement on Alibaba’s part and even a potential acquisition.