Shares of Momo (NASDAQ:MOMO), the Chinese online-dating service, were climbing today although there was no company-specific news. Instead, Momo seemed to be gaining on anticipation for the upcoming "phase one" trade deal between the U.S. and China, and as reports emerged today that the U.S. would remove China from its list of currency manipulators. The stock closed up 9.4% on the news.
Chinese stocks were up broadly today, as the MSCI China ETF gained 1.9% and the tech-heavy Shenzhen Composite gained 1.4% in China overnight.
Momo shares have been volatile over the last year, as the Chinese government has cracked down on its apps at times for unwanted or vulgar content; Momo's Tantan app was temporarily suspended last spring.
Among the components of the phase one deal expected to be signed on Wednesday are increased agricultural purchases from China, and the end of forced technology transfers to China, in exchange for U.S. lowering or eliminating some tariffs. Today, the U.S. also said it would no longer designate China as a currency manipulator.
While Momo doesn't appear to be a direct beneficiary of the phase one agreement, the stock would benefit from improving growth in the Chinese economy. Its general volatility is another reason that the stock is up by nearly double digits today.
Keep an eye out to see how Momo shares perform on Wednesday, once the deal is signed. The phase one agreement hasn't yet been finalized, and negotiations between the two sides have long been thorny.
Investors could also see a "buy-the-rumor, sell-the-news" movement later in the week, as expectations for the deal are now baked into Momo stock.