Surge in Options Trading for China Internet ETF KWEB Amid Market Volatility
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1 hour ago
0mins
Source: CNBC
- Market Performance Contrast: While U.S. stocks continue to rise, with the Nasdaq achieving its best quarter since 2020, China's iShares China Large-Cap (FXI) has dropped 18%, highlighting a stark divergence between the two markets.
- KWEB's Weak Performance: The KraneShares CSI China Internet ETF (KWEB) has fallen over 40% since its peak in October, primarily due to concerns over AI valuations and trade tensions, reflecting investor caution towards the Chinese market.
- Active Options Trading: Despite challenges, options trading volume in KWEB surged to nearly three times the 30-day average, with 612,000 of the 628,000 contracts traded being calls, indicating a bullish sentiment among investors for a potential rebound.
- Large Trade Analysis: The largest trade involved the purchase of nearly 102,000 29-strike calls, valued at $11 million, suggesting that investors are optimistic about a 23% price increase for the ETF in the near future.
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Analyst Views on NKE
Wall Street analysts forecast NKE stock price to rise
21 Analyst Rating
14 Buy
7 Hold
0 Sell
Moderate Buy
Current: 41.480
Low
62.00
Averages
76.11
High
110.00
Current: 41.480
Low
62.00
Averages
76.11
High
110.00
About NKE
NIKE, Inc. is engaged in the designing, marketing and distributing of athletic footwear, apparel, equipment and accessories and services for sports and fitness activities. The Company's operating segments include North America; Europe, Middle East & Africa (EMEA); Greater China; and Asia Pacific & Latin America (APLA). It sells a line of equipment and accessories under the NIKE Brand name, including bags, socks, sport balls, eyewear, timepieces, digital devices, bats, gloves, protective equipment and other equipment designed for sports activities. It also designs products specifically for the Jordan Brand and Converse. The Jordan Brand designs, distributes and licenses athletic and casual footwear, apparel and accessories predominantly focused on basketball performance and culture using the Jumpman trademark. The Company also designs, distributes and licenses casual sneakers, apparel and accessories under the Chuck Taylor, All Star, One Star, Star Chevron and Jack Purcell trademarks.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Inflationary Pressures: Cleveland Federal Reserve President Beth Hammack noted an “insatiable” demand for AI infrastructure, warning it could drive inflation higher, suggesting that the Fed may need to raise interest rates to combat persistently high inflation levels.
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- Market Performance Contrast: While U.S. stocks continue to rise, with the Nasdaq achieving its best quarter since 2020, China's iShares China Large-Cap (FXI) has dropped 18%, highlighting a stark divergence between the two markets.
- KWEB's Weak Performance: The KraneShares CSI China Internet ETF (KWEB) has fallen over 40% since its peak in October, primarily due to concerns over AI valuations and trade tensions, reflecting investor caution towards the Chinese market.
- Active Options Trading: Despite challenges, options trading volume in KWEB surged to nearly three times the 30-day average, with 612,000 of the 628,000 contracts traded being calls, indicating a bullish sentiment among investors for a potential rebound.
- Large Trade Analysis: The largest trade involved the purchase of nearly 102,000 29-strike calls, valued at $11 million, suggesting that investors are optimistic about a 23% price increase for the ETF in the near future.
See More
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- Exit from Nike Position: Jim Cramer's Charitable Trust sold 1,600 shares of Nike (NKE) at approximately $41 each, marking a complete exit from the stock and reflecting a cautious outlook on the company's future performance.
- Muted Earnings Report: While there are some positive signs from management's turnaround strategy, the latest earnings report remains unsatisfactory, indicating slow progress in returning to growth, which could impact investor confidence.
- Improved Inventory Management: The company has become more aggressive in reducing inventory and markdowns to enhance gross margins, yet management still anticipates a business inflection in the next two quarters, aiming for a return to year-over-year sales and earnings growth.
- Investor Day Catalyst: The upcoming Investor Day in November could serve as a positive catalyst if inventory is cleaned up, and despite currently facing a 40% loss, Cramer hopes to redeploy funds into stocks with clearer growth stories.
See More
Stock Market Strong Gains, Nike Sales Decline
- Market Performance: Despite consumer sentiment nearing record lows, the stock market showed strong gains in the first half of the year, with the S&P 500 and Nasdaq Composite recording their largest quarterly gains since 2020, driven by robust demand for semiconductor and cybersecurity stocks.
- Nike Earnings: Nike's earnings report revealed a 1% decline in total revenue, with a significant 12% drop in sales in the crucial Chinese market leading to a 3% drop in shares during after-hours trading, indicating challenges in key markets.
- Inflation Warning: Cleveland Fed President Beth Hammack warned at a conference in Portugal that the
See More
Nike Embarks on a Decade-Long Rebuild Strategy
- Disappointing Earnings Report: Nike reported a full-year diluted earnings per share of $2.10, reflecting only a 3% decline year-over-year, but heavily reliant on a $986 million tariff refund, indicating vulnerability in profitability, with the CEO admitting that sportswear remains lagging, particularly in Greater China where sales have notably declined.
- Negative Market Reaction: Following the earnings report, Nike's stock price quickly dipped 10% before stabilizing at around a 3% decline ahead of market open, reflecting investor concerns regarding the company's future growth potential, especially in the underperforming sportswear and Jordan streetwear segments.
- Challenges in Growth Areas: Despite achieving five consecutive quarters of double-digit growth in its running business, adding approximately $1 billion in revenue, the CEO emphasized that overall performance still falls short of expectations, particularly with ongoing sales declines in Greater China impacting the company's strategic positioning.
- Uncertain Future Outlook: Management did not provide specific guidance for fiscal 2027, anticipating further revenue declines in the first half, which raises doubts among investors about Nike's long-term development strategy, especially amid intensifying global market competition.
See More
US Stocks Surge, Nike Faces Sales Decline
- Strong Market Performance: Despite a lackluster June, the S&P 500 and Nasdaq Composite posted strong quarterly gains, with Nasdaq achieving its largest quarterly increase since 2020, driven by robust performances in semiconductor and cybersecurity sectors, indicating a rebound in market confidence towards tech stocks.
- Nike Sales Decline: Nike reported a 12% drop in sales in the critical China market in its earnings report, while North America saw a 3% revenue increase, leading to an overall 1% decline in revenue year-over-year, highlighting challenges in international markets that may impact future growth strategies.
- Inflationary Pressures: Cleveland Federal Reserve President Beth Hammack noted an “insatiable” demand for AI infrastructure, warning it could drive inflation higher, suggesting that the Fed may need to raise interest rates to combat persistently high inflation levels.
- Amazon's New Investment: Amazon announced a $1 billion investment to establish a new Forward Deployed Engineering team aimed at accelerating technical transformation and AI deployment, marking a significant step in its cloud services innovation and reinforcing its market leadership position.
See More
Surge in Options Trading for China Internet ETF KWEB Amid Market Volatility
- Market Performance Contrast: While U.S. stocks continue to rise, with the Nasdaq achieving its best quarter since 2020, China's iShares China Large-Cap (FXI) has dropped 18%, highlighting a stark divergence between the two markets.
- KWEB's Weak Performance: The KraneShares CSI China Internet ETF (KWEB) has fallen over 40% since its peak in October, primarily due to concerns over AI valuations and trade tensions, reflecting investor caution towards the Chinese market.
- Active Options Trading: Despite challenges, options trading volume in KWEB surged to nearly three times the 30-day average, with 612,000 of the 628,000 contracts traded being calls, indicating a bullish sentiment among investors for a potential rebound.
- Large Trade Analysis: The largest trade involved the purchase of nearly 102,000 29-strike calls, valued at $11 million, suggesting that investors are optimistic about a 23% price increase for the ETF in the near future.
See More
Nike Reports 12% Sales Decline in Greater China Amid Earnings Beat
- Nike Sales Decline: Nike reported a 12% sales decline in the Greater China market, which, despite an earnings and revenue beat in its fiscal fourth-quarter report, raises concerns about future performance in this critical region.
- Constellation Brands Earnings Beat: Constellation Brands reported first-quarter earnings of $3.43 per share, exceeding analysts' expectations of $3.20, with revenue also surpassing forecasts, indicating resilience in a competitive market.
- Shutterstock and Getty Merger Failure: Getty's cancellation of its proposed merger with Shutterstock due to U.K. regulatory demands led to a sharp decline in Shutterstock's stock by over 30%, while Getty fell 4%, highlighting the impact of regulatory environments on M&A activities.
- Kroger Acquires Giant Eagle: Kroger announced its acquisition of food and pharmacy retailer Giant Eagle for $1.65 billion, resulting in a 2% drop in its stock price; however, the CEO emphasized that this move will expand the company's reach into attractive adjacent markets.
See More
