US Stocks Starting to Trade Just as Badly as Chinese Shares on Tariff and Trade War News

Gambling in Macau: These shares also tanked, with U.S.-listed shares doing worse. Melco Resorts & Entertainment Ltd. (NASDAQ: MLCO) was down 3.6% at $19.67 on Friday with a $1.15 billion market cap. That is down about 27% from its 52-week high. Wynn Resorts Ltd. (NASDAQ: WYNN) saw its shares fall over 4.3% to $105.33, down about 30% from its 52-week high and down almost 50% from the start of 2018. Las Vegas Sands Corp. (NYSE: LVS) was down 2.4% at $53.11, down 24% from its 52-week high and down about 34% from its high at the start of 2018.

Restaurants in China: Yum China Holdings Inc. (NYSE: YUMC), the local operator of KFC, Pizza Hut and Taco Bell that is now (mostly) free of Yum! Brands itself, was down 3.5% at $42.57 on Friday. That is down 12% from its 52-week high. Yum! Brands Inc. (NYSE: YUM) was down 1.7% at $115.31 on Friday, but it is down only about 3% from its 52-week high.

Coffee in China: Luckin Coffee Inc. (NASDAQ: LK) is sometimes referred to as the “Starbucks of China.” Luckin was down 2.1% at $18.79 on Friday, and the shares were down another 0.9% at $18.62 in Friday’s after-hours session. This is now down 30% from its post-IPO peak, but comparing peaks after an IPO is sometimes an apples-to-oranges proposition. Starbucks Corp. (NASDAQ: SBUX) was down 1.86% at $94.70 on Friday, but this is down only 5% from its recent all-time high.

Telecom and wireless in China: China Mobile Ltd. (NYSE: CHL) is one of the largest mobile telecom service providers in China, but a 0.9% drop to $41.65 on Friday has taken its market cap down to $171 billion. The stock is now down over 25% from its 52-week high. China Mobile was a $71 ADS back in 2015. China Unicom (Hong Kong) Ltd. (NYSE: CHU) was down 1.1% at $9.93 on Friday. This company is another of the major telecom companies in China and is now down over 25% from its 52-week high with a $30 billion market cap. This was nearly a $19 stock at one point in 2015. AT&T Inc. (NYSE: T) was down 1.6% at $34.82, and Verizon Communications Inc. (NYSE: VZ) was down 1.5% at $55.92 on Friday.

Life insurance in China: China Life Insurance Co. Ltd. (NYSE: LFC) saw its ADSs fall 0.7% to $11.49 on Friday, with a market cap that is still $101 billion. Its shares are down about 21% from its 52-week high. American International Group Inc. (NYSE: AIG) was down 2.3% at $52.59, with a $45.6 billion market cap on Friday, and MetLife Inc. (NYSE: MET) was down 3.5% at $44.59, with a $42.1 billion market cap.

Oil and gas giants: China Petroleum & Chemical Corp. (NYSE: SNP) was down 1.5% at $58.02, with an $81 billion market cap on Friday. That is down about 43% from its 52-week high. CNOOC Ltd. (NYSE: CEO), another top energy stock, was down 2.9% at $141.46 on Friday, with a $63 billion market cap. CNOOC was last seen trading down just over 30% from its 52-week high. Exxon Mobil Corp. (NYSE: XOM) was down 3% at $67.49 on Friday, and that is now down over 27% from its 52-week high.

Friday’s key moves in the top ETFs and closed-end funds that track China were shown as follows:

  • iShares China Large-Cap (NYSEARCA: FXI) is the top ETF tracking China, and it was down 1.8% at $38.43 on Friday, down 16.6% from its 52-week high.
  • Deutsche X-Trackers Harvest CSI300 CHN A (NYSEARCA: ASHR) traded down about 1.9% to $26.67 on Friday, and it is down about 13.5% from its 52-week high.
  • iShares MSCI Hong Kong (NYSEARCA: EWH) was down 1.7% to $23.06 on Friday, and it is down 15% from its 52-week high.
  • SPDR S&P China ETF (NYSEARCA: GXC) was down 2.3% at $88.03 on Friday, and that is down 16% from its 52-week high.
  • The China Fund Inc. (NYSE: CHN) was down 1.6% at $19.21 on Friday, and that is down about 11.2% from its 52-week high.
  • Morgan Stanley China A Share Fund Inc. (NYSE: CAF) was down almost 1.8% to $20.81 on Friday, and that is a drop of over 15% from its 52-week high.

Unfortunately, this trade war is a double-edged sword that will not come without some pain to the consumer and the economy in the United States. China may be far worse off in the trade war than the United States. Friday’s reaction in many top U.S. companies, particularly those with large revenues from China, was rather brutal on the American side of the equation.

Within some degree of reason, China doesn’t have to care what happens in its economy, nor whether politicians can be thrown out of office every four, six and eight years. China is also known for thinking decades ahead, or even a century. The United States doesn’t have that luxury.

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