Yulong Eco-Materials Ltd (NASDAQ: YECO), China Recycling Energy Corporation (NASDAQ: CREG), China Ceramics Co Ltd (NASDAQ: CCCL), and ChinaCache International Holdings Ltd (NASDAQ: CCIH) are all flying in the trading session this morning, all with gains over 10% and one trading at two times what it was trading at yesterday. Interestingly, none of these companies has released any news. Today, we’ll talk about:
- What’s going on with YECO, CREG, CCCL and CCIH;
- why you should be very careful if you plan on getting involved;
- what we’re seeing in the market; and
- what we’ll be watching for ahead.
YECO, CREG, CCCL And CCIH Are Soaring, But Be Careful
As mentioned above, Yulong Eco-Materials, China Recycling Energy Corporation, China Ceramics and ChinaCache International Holdings are all seeing tremendous gains in the market this morning. After digging in, we’ve found that none of these companies has issued a press release or SEC filing.
Nonetheless, Yulong Eco-Materials flew more than 500% yesterday after announcing the acquisition of Millennial Sphere and a restructuring plan. Chinese stocks tend to gain momentum off of one another, and this news and following run could be the reason for the run in the market today. Nonetheless, I urge you, be careful here!
Why You Should Be Careful With These Stocks
One of the big things that we should keep in mind when investing is economic climate. At the moment, there are quite a few unknowns when it comes to China. This is in large part, the result of mounting tensions between the United States and China in the midst of a trade war. As tarrifs sway back and fourth, economic conditions in China could see some real pain.
A big problem here is that a way that China can combat the mounting economic pressures through the tradewar is the devaluation of their currency. Should the Chinese currency see large declines, US investors in Chinese stocks would see immediate, and likely dramatic losses.
It’s also worth mentioning that these tensions that could threaten any growth in stocks like YECO, CCIH, CCCL, CREG, and others seem to be getting worse. In fact, Trump just announced that he plans on ending a treaty known as the Postal Treaty with China. The move will save the US about $170 million a year in subsdidies offered to Chinese shippers. At the same time, it may lead to yet another burden on the Chinese economy and companies that operate within the economy. So, while Chinese stocks are gaining today, there’s a good reason to be wary if you’re considering getting involved in them.
What We’re Seeing In The Market
Chinese stocks seem to be making a run for the top across the board. YECO, CREG, CCCL and CCIH are trading at $13.44, $2.06, $5.43, and $1.28 respectively. These values come after respective gains of 31.76%, 58.13%, 203.35%, and 15.31% so far today.
Stop wasting your time! Start finding winning trades in minutes with Trade Ideas!
What We’ll Be Watching For Ahead
Moving forward, the CNA Finance team will continue to keep a close eye on YECO, CREG, CCCL, CCIH and other Chinese stocks. In particular, we’re watching the trade war closely and the effect that it has on the Chinese economy. Nonetheless, we’ll continue to follow the news closely and bring it to you as it breaks!
Never Miss The News Again
Do you want real-time, actionable news delivered to your inbox? Join the CNA Finance mailing list below!