Macro Insight: A Singles Day catalyst

EXPECTING: China’s 13th annual Singles Day shopping event tomorrow is the world’s largest. But this year is different. It has a longer sales-season (like last, for the first time), and more merchants (+16% versus year). But also a weaker consumer (retail sales growth slowed to 4%) and a government focused on ‘common prosperity’ (and companies on ESG and charity). A strong day would be a relief to concerns over the Chinese consumer, the limits of ecommerce penetration, and a catalyst for depressed e-commerce stocks.

FOCUS: 1) How strong is the consumer? Retail sales have slowed but recent services PMI has rebounded a bit. 2) How high can ecommerce go? China’s e-commerce penetration leads the world at over 50%, more than double the global average. 3) Will this boost China platform stocks? Singles day is only a fraction of  Alibaba (BABA) and (JD.US) sales, but a strong event could refocus investors on the depressed sector.

GLOBAL: The global online sector has also lagged after a huge 2020 performance. Hurt by China woes, the bricks-and-mortar reopening, and supply chain and cost pressures. See @ShoppingCart of 30 global online stocks, and @ChinaTech of 30 local leaders.

TODAY: Inflation concerns return. Chinese prices rose a greater than expected 1.5% vs last year. US consumer prices today seen rising above their six-month range, up to 5.8%.

All data, figures & charts are valid as of 09/11/2021