Feb. 6, 2010 (Chinavestor) Growing uncertainty and earnings have kept volatility at a high level for the first week in February for China stocks. Most of the uncertainty comes amid fiscal indiscipline from Greece and Portugal, hurting the euro and strengthening the dollar. Stronger dollar sent commodity prices along commodity stocks tumbling. Mixed jobs report from the U.S. added to he uncertainty. While unemployment fell under the psychologically important 10%, the loss of 20,000 non-farm jobs in January is much worse than the expected addition of 15,000 jobs. Again, a reminder that the global economic recovery will be gradual and slower than many of us have hoped for.
Stocks mentioned in the report include Sohu.com (NASDAQ:SOHU), Ctrip.com (NASDAQ:CTRP), Baidu.com (NASDAQ:BIDU), Sina Corp. (NASDAQ:SINA), JA Solar (NASDAQ:JASO), China Green Agriculture (NYSE:CGA) and Chindex International (NASDAQ:CHDX).
Chinese stocks got another challenge for the week when Bank of Communications (HKG:3328), the fourth largest Chinese financial institution, announced plans to replenish capital. Investors started to question the strength of the balance sheets of Chinese banks after a record lending in 2009.
On the earnings front, Chinese companies have started to report 2009 fourth quarter earnings. Sohu.com (NASDAQ:SOHU) reported a revenue and profit growth year-over-year but guided lower for the first quarter of 2010. Altogether Sohu.com (NASDAQ:SOHU) failed to impress investors sending her shares down 7% at the open. But as time passed on Monday, investors digested the news and came to a realization that SOHU's numbers were not as bad after all. The stocks ended Monday flat and fell -1.67% for the week. See our related story: Sohu '09 Q4 numbers from a distance.
Another internet heavy weight, Ctrip.com (NASDAQ:CTRP) reported the week. Results and market reaction were very similar to that of Sohu. Share price of Ctrip.com (NASDAQ:CTRP) shed -2.3% for the week. See our related coverage: Ctrip '09 Q4 disappoints - how bad is it?
Looking forward, two DJIA components are going to report this week: The Coca-Cola Company (NYSE:KO) and Disney (NYSE:DIS). When it comes to Chinese stocks, the upcoming week will be full of action. Baidu.com (NASDAQ:BIDU) is the largest, most liquid Chinese ADR listed on the NASDAQ. The company's earnings will have ramifications for the rest of the sector, including Sina Corp. (NASDAQ:SINA), online gamers, and advertisers. BIDU is scheduled to report on February 9 at 8:00 P.M. Looking at the lat five quarters, BIDU have always surprised to the upside - something that just might be the case, again.
Baidu.com earnings: consensus vs. actual
Source: Reuters.com
Another stock to watch next week is JA Solar (NASDAQ:JASO). While the company is not the largest in the sector, JASO will be the first in a line of solar companies to report earnings. Expectations are high after all solar companies reported better-than-expected sales and profit numbers just three months ago and issued improved revenue outlook. Earnings of JA Solar (NASDAQ:JASO) will help investors to assess the financial health for the rest of the solar companies. JA Solar is scheduled to report on February 11 before the market opens.
China Green Agriculture (NYSE:CGA) will report on Monday before the market open just like Chindex International (NASDAQ:CHDX). For a complete earnings calendar scroll to the bottom of the February 2010 Newsletter: Too much anxiety.
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