Wal-Mart Headed to China and Other Financial News
Have you been keeping up with the markets? So far this week, there was turmoil and drama galore. Several big corporations, such as Wal-Mart (WMT) and Apple (AAPL), have announced their intentions to try and conquer the foreign markets. Meanwhile, Brexit and the Fed have plagued investors with worries over the EU and pending interest rate hikes. Don’t get carried away too soon. There is some good news on the horizon. One thing that will cause many worries is the downturn of crude oil prices. Just weeks ago, oil soared to 2016 heights, by reaching levels over $50 a barrel.
Recent polls, which have shown increased support for the UK leaving the EU, have helped to push crude oil prices lower and lower. Today, during a conversation with Fed Chairwoman Janet Yellen, the woman admitted Brexit could pose a substantial risk to the American economy. Her words were met with grave worries and immediately sent stock prices downward. Another thing to consider is the recovery of Canada, after one of the country’s biggest wildfires. Now that the wildfires have settled, oil producers within the areas will be able to return to their wells and begin producing oil once more. This will undoubtedly increase the supply and could push oil prices even further down.
Meanwhile, Apple has hit a roadblock in its attempt to take over the Chinese market. Beijing has filed an injunction against the company, in order to prevent them from making the iPhone 6 and iPhone 6 Plus available to the Chinese public. The injunction stems from a conflict regarding the phone’s exterior design and whether or not Apple infringed upon Shenzhen Baili’s patents. Very little information is available regarding the company, but it appears they could be linked to the smart phone startup company, Digione. It should be known that Baidu, which is an Internet pioneer in China, has become Digione’s biggest investor in past months. Nonetheless, Apple will have a difficult time attempting to do battle with Beijing and Baidu.
Even with Apple intention to delve into innovative virtual data rooms, the battle is likely a lost cause for the company, which has also set its sights on India in recent months. It was recently reported that Wal-Mart sold their e-commerce grocery store, Yihaodian to JD.com. The Chinese market can be very volatile at times and this appears to be one of those times. This deal is estimated to be worth $1.5 billion and Wal-Mart will be able to link their Sam’s Clubs and supply chains to JD.com. Many observers seem to think that this sale indicates how poorly Wal-Mart’s e-commerce grocery company has developed in China.
Wal-Mart had not expected the high labor costs and logistics with their e-commerce business. This deal may be an opportunity for Wal-Mart to be more competitive with the Amazon Marketplace. Foreign retailers are facing many challenges in China’s e-commerce market. Will Wal-Mart be able to conquer the foreign market? The future is uncertain, but the move has definitely excited investors.