The resurgence in high-flying technology stocks is far from just a US phenomenon.
In fact, the Guggenheim China Tech exchange-traded fund, ticker CQQQ, has outpaced the Nasdaq 100 Index’s rally since the release of Facebook’s earnings after the close on April 25, results which helped reignite the sector’s advance.
Both the FAANG constituents stateside (Facebook, Apple, Amazon, Netflix and Google parent Alphabet) and China’s BAT trio (Baidu, Alibaba, and Tencent, which are the three top holdings of the Guggenheim fund) had come under acute pressure in mid-April as crowded trades cracked.
Tencent has continued to trade sideways in recent weeks but the other two Chinese components have more than picked up the slack, bolstered by stellar financial performance.
Internet search-engine operator Baidu and e-commerce giant Alibaba each posted results that exceeded analysts’ expectations along with a brighter outlook for top-line growth. Alibaba is The South China Morning Post’s parent company.
Like their US peers, pessimism about these Chinese behemoths had been mounting ahead of quarterly results.
A potentially fraying trading relationship between the world’s two largest economies compounded concerns.
In March, the Chinese tech ETF plunged more than 5 per cent, its biggest daily drop since 2015, amid the Trump administration’s pursuit of tariffs and Tencent’s company-specific travails.