Shares of Vipshop Holdings (NYSE:VIPS) were moving higher last month after the Chinese online retailer got a boost from reports that the U.S. and China were making progress in their trade negotiations and that certain elements of an agreement were close to being complete. As a result, the stock finished the month of October up 29%, according to data from S&P Global Market Intelligence.
As you can see from the chart below, the stock spiked toward the end of the month as news broke about a potential trade deal.
Vipshop shares jumped 14.2% on Oct. 25, tracking with other Chinese stocks like Pinduoduo that rose on news that the two countries were close to completing "phase one" of a trade deal. In exchange for China's agreeing to buy U.S. farm products, the U.S. was expected to remove some of the tariffs it had imposed, as well as others that are scheduled to begin on Dec. 15.
This isn't the first time we've seen Vipshop display sensitivity to trade tensions -- the stock plunged on trade tensions in August after President Trump threatened to slap another round of tariffs on China. The online discount retailer is especially sensitive to trade negotiations as it only recently ended a long slump of revenue growth slowing for several quarters. With the Chinese economy already losing momentum, investors are afraid that an all-out trade war could sink its prospects and therefore Vipshop's potential comeback.
Vipshop shares have now more than doubled this year, and the stock could see more gains this month as trade negotiations are ongoing and the company is set to report third-quarter earnings later in November. Analysts expect earnings per share to increase from $0.11 to $0.16, but see revenue falling 0.8% to $2.62 billion. The stock surged following the company's second-quarter report, so investors are likely hoping for a repeat performance.