Chinese Internet stocks joined in a broad rally across Wall Street Tuesday as much of the sector rose following what was seen as a moderately upbeat assessment of China's consumer sentiment.
Over the weekend, China completed what is known as its "618" shopping season which covers the first 18 days of the month of June--hence, the 618 label--and is the country's second-largest consumer shopping event next to its annual Singles Day event that is held in November. It was also China's first such major consumer-related shopping event since the Beijing government locked down a handful of cities and production facilities due to a recent spike in Covid-19 cases in the country.
Only so much detail was made public about how the 618 season turned out. However, J.P. Morgan analyst Andre Chang said that the limited data available on the gross market value of goods sold during the period suggested that overall revenue during the second quarter of the year "should be better than the cautious guidance provided by the e-commerce companies in general.
One of the few companies to give significant information about its 618 sales was JD.com (NASDAQ:JD), which said it sold $56.5 billion in goods on its platform during 618, an increase of 10.3% from a year ago. However, during the 618 event in 2021, JD (JD) saw year-over-year sales rise almost 28% on a year-over-year basis.
Chang said that with JD's (JD) results in mind, "We still need to look for signs of further improvement of consumption before we get more bullish" about consumer spending recovering in the second half of the year. JD (JD) shares fell 2.5% on Tuesday.
Among other Chinese companies in the e-commerce sector, Aibaba (NYSE:BABA) shares rose 4%. Chang said that Alibaba (BABA) disclosed "very limited information" about its 618 sales, but that based on reports from apparel companies, which are Alibaba's (BABA) strength, the company's 618 performance "should be much weaker than JD's."
Pinduoduo (NASDAQ:PDD) had a strong day Tuesday, with its shares rising more than 6%. Chang said that Pinduoduo (PDD) didn't disclose its overall 618 sales, but that its sales of home appliances and cosmetics both more than doubled from a year ago.
Among other notable Chinese Internet companies, Weibo (WB) shares rose 4.6%, Baidu (BIDU) gained 4.2% on the day, Tencent Holdings (OTCPK:TCEHY) shares rose more than 3% and Bilibili (BILI) closed with a gain of more than 4%.
U.S. stocks on the whole had a good day, Tuesday, with all the major indexes scoring notable gains following last week's bruising performance.