TOP 3 most traded CFD stocks of the week: Boeing, Amazon, Alibaba

Boeing - the light at the end of the tunnel?

Boeing has always been the darling of investors and the American public. It is one of the largest aircraft manufacturers in the world and one of the most important partners of the US military. However, in recent years, one problem after another has built up around Boeing. The 737 Max accidents in 2018 and 2019 have grounded the model, leading to losses on Boeing stocks . An even bigger blow was dealt to the company by the coronavirus, which virtually reset global demand for aircraft. For several quarters in a row, Boeing has reported absolutely tragic results, and at times there has even been talk of bankruptcy. Where does Boeing stand now?

Chart 1: Boeing shares on the MT4 platform on the D1 timeframe along with the 50 and 100 day moving averages

The year 2022 is not very positive for Boeing (as well as for the whole market). Even so, Boeing is lagging behind the market, having written off over 22% year-to-date. Plus at the end of July, Boeing reported financial results that were rather negative. The company delivered 121 new aircraft during the quarter, which is 42 more on a year-on-year comparison. In addition, Boeing is set to resume deliveries of the 787 Dreamliner. Another positive news is the order from Delta Airlines for 100 737 Max aircraft. However, that’s all when it comes to positives.

Both loss per share and earnings were quite significantly below expectations. In addition, the company is struggling to increase its production due to supply chain and employee issues. At least it has always been able to rely on revenues from military contracts, but these have fallen short of expectations too. Moreover, the company is still waiting for the 737 Max to return to Chinese skies. It still has over 290 aircraft grounded, about half of which are expected to go to China.

However, despite the negative news, Boeing could get a second wind thanks to rising geopolitical tensions. This is what has made Boeing one of the most sought-after stocks not only in Purple Trading, but around the world as well. Indeed, Nancy Pelosi's visit to Taiwan has once again stirred up political relations between the US and China. In addition, other US government officials are reportedly going to Taiwan. Let us just remind you that Taiwan is extremely important for the whole world, thanks to the production of chips. At the same time, China considers this territory as its own against Taiwan’s will. In the event of a further escalation of the conflict, Boeing could also benefit significantly from any US (and partner) arms race. However, the problem remains a weak supply chain that prevents Boeing from further expansion.

Amazon - a giant on sale?

Amazon shares have been trading at a 20:1 split for over two months. Since then, their development has been a roller coaster ride. Even so, Amazon shares have gained more than 10% since the split. However, they are still down some $50 compared to their yearly high. So is now the right time to buy the giant's stock? Earnings results from the end of July would suggest that Amazon is in great shape. Sales beat expectations and the Amazon Web Services section is still performing above expectations. The outlook for the third quarter is also positive, with Amazon now seeing sales between $125 billion and $130 billion, which would be a 13-17% increase compared to the third quarter a year earlier.

But it wasn’t all just rainbows and unicorns for Amazon either. Due to inflation, the company's costs are rising significantly and, like other technology companies, Amazon has decided to lay off employees. During the second quarter, it laid off almost 100,000 employees. In addition, Amazon wrote off a large loss due to its investment in the car company Rivian, whose shares fell by half during the second quarter. Amazon has already written off more than USD 11 billion on that investment this year (Still feeling bad due to some of your poor investment choices?). But back to the positives. Unlike rivals Meta Platforms and Alphabet, Amazon has managed to increase its ad revenue. So is now the perfect time to buy?

Like Walmart, Amazon is a reflection of the overall mood of US consumers. Sales for both companies have been a pleasant surprise and the outlook also looks interesting. However, the clouds are still gathering over the markets and the recent bear market rally could be near, if not past, its peak. Thus, there may be even better opportunities for stock purchase if nervousness in the markets increases further. The current period thus favours speculators more.

Alibaba - a paradise for speculators

Among the biggest companies, Alibaba may have suffered the most in recent years. The company has been under pressure due to constant speculation about delisting in the US and also because of problems with Chinese regulators. It all culminated in the failure of Ant Group's IPO and Alibaba founder Jack Ma even disappeared completely for a few weeks. In addition, the coronavirus is still raging in China, significantly affecting the economy there, which is gradually slowing down. Moreover, since the beginning of the year, the already battered Alibaba shares have written down almost a quarter of their capitalisation. A look at the chart below suggests that Alibaba stock is a haven for traders seeking volatility.

Alibaba shares are definitely one of the most polarizing in the market. Some traders see them as a great (and now cheap) opportunity to invest in the world's largest e-commerce company in the world's largest market. Others, on the other hand, see the risk associated with investing in the Chinese market as too great. Rising geopolitical tensions between China and the US would tend to favour the latter group. Moreover, big investors are leaving Alibaba, which again attracted the attention of speculators last week.

A large part of its stake was sold to SoftBank, an investment group led by Masayoshi Son. Who practically built his name on the investment in Alibaba, and his exit is thus a distinctly bearish signal, even though SoftBank is now known to be struggling financially. However, it’s legendary investor Ray Dalio, who has been a big supporter of Chinese companies, amd who should be getting even more attention now. That’s because even his company, Bridgewater Associates, sold its stake in Alibaba last week. So it seems that big investors are abandoning the sinking ship. By all accounts, Alibaba shares will remain a haven for speculators.