China's economic data misses on expectations while tech earnings are on tap

Yahoo Finance contributor Remy Blaire reports live from the New York Stock Exchange to discuss China's economic data missing expectations, Baidu Q1 earnings, and Alibaba Q4 earnings being released later this week.

Video transcript

- Stocks looking for direction in early trade amid a big miss for Home Depot and a rebound in retail sales. Let's get to the NYSE and Yahoo Finance contributor Remy Blaire. Remy, great to see you this morning.

REMY BLAIRE: Good morning. And, as you mentioned, US stocks have opened in the red. And although we saw a brief pop into positive territory for the NASDAQ, overall, there are concerns about retail sales figures, as well as that disappointing guidance out from Home Depot earlier this morning.

Meanwhile, overseas in China, we got a slew of economic data releases. And we did get some double-digit percentage gains. But at the same time, they still came in weaker than estimates.

Taking a closer look at the April data coming out from China, we saw retail sales rising 18.4%, industrial production up 5.6% year-over-year, and fixed asset investment up by 4.7%. At the same time, we got two readings in terms of manufacturing PMI out from China. But they both came in below the 50 reading.

And moving on to companies' stocks, let's take a look at Baidu. Baidu reported first-quarter revenue that did top estimates. Now, keep in mind that revenue rose by 10%. And this did come as businesses upped their advertising spend.

Strict COVID restrictions were dropped in the end of 2022. And this was the first reading for the company following those lifting of restrictions. Although we did see gains for the company before the closing bell, we are seeing that stock hover near the flat line this morning.

Now, I want to move over to Alibaba. The company will report earnings ahead of the opening bell here in the US on Thursday, May 18. Now, ahead of that forecasts do call for an increase in EPS as well as improvement in revenue. This does come after the fourth-quarter '22 figures did post an EPS miss.

Meanwhile, Alibaba announced that it is splitting its business into six separate units. And the company says this new decentralized structure could save the company a whopping $1 billion before the end of 2023. We are seeing shares of the e-commerce giant trade on near flat today. But following that announcement earlier this year in March, we did see Alibaba shares pop by double digits.

And I do want to mention one thing. Money manager Michael Burry of "The Long Short" fame made a contrarian bet on Alibaba. And this is according to the latest 13F filings that were released on the SEC website on Monday.

Now, keep in mind that China's economy is still recovering. And its latest GDP figures gained by 4 and 1/2% earlier this year. So compared to the US, we are seeing upside in terms of economic data. But at the same time, it might not be enough to improve sentiment over in China.