Shares of Chinese tech stocks Alibaba (BABA) and JD.com (JD) are trending up as the market pulls back, with Chinese leaders announcing this week that they will take new measures for further stimulus to support growth in the economy. So far, China has already given out $112 billion (800 billion yuan) to commercial lenders for 1-year loans.

Additionally, shares of Chinese EV maker XPeng (XPEV) dropped 7% on Friday after a filing revealed shareholder Alibaba would sell $25 million worth of stock owned by its Taobao business segment.

Lennar (LEN) stock falls after posting fourth-quarter results which showed gross margin home sales falling short of estimates.

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Video Transcript

JULIE HYMAN: Let's talk about Chinese stocks today because we're seeing tech shares like Alibaba and JD.com trading higher and even holding up as the overall market pulls back. China announcing new stimulus measures to support a slowing economy. And, you know, there's been this whole debate this year about how aggressive China is going to be with some of these stimulus measures to combat the slowing economy. So what happened was a lending facility, one-year loans to commercial lenders, $112 billion from the central bank, sort of, being pushed out into the Chinese economy.

JOSH LIPTON: Which I read that was actually a record cash injection.

JULIE HYMAN: Exactly.

JOSH LIPTON: Yeah.

JULIE HYMAN: So it looks like they're stepping up a little bit there was also a relaxation of home-buying curbs in certain cities, the biggest cities Beijing and Shanghai. And so all of that, not specifically to Chinese tech, but seeing, kind of, a lift overall there because of this news.

JOSH LIPTON: Yeah, I guess-- listen, the Chinese economy has been shaky, you can see it in the retail sales, you can see in the home prices. But I guess if you want to bet maybe stimulus is coming, more stimulus in 2024, then you maybe get more confident to commit capital to some of these names. But it has been rough sledding.

I mean Baba is well in the red this year. JD is even worse. That stock's lost about half its value in 2023 now.

JULIE HYMAN: Yeah, I guess one of the stocks that has continued, I believe, to do well this year, yep PDD, up 82%. The owner of Temu, right, which has been, like, one of the runaway hits this year. So that's been an interesting outlier.

One outlier today that I wanted to mention linked to this story is Xpeng. So those shares are not participating in some of the lift we're seeing for some other companies and that's because Alibaba is a shareholder in Xpeng. And it said in a filing that it's Taobao China, which is the one that holds the Xpeng shares filed to sell $25 million of those shares effective today. So that's why we're seeing Xpeng move in a very dramatically opposite direction from some of those other shares.

JOSH LIPTON: All right, now here's another one that's trending lower. Check out shares of Lennar trading down today. That's after reporting a weak gross margin forecast for 2024. You can see down about 4%.

So this is, kind , of a rough recession although we should mention it's off its lows now. And we should also mention, you got to keep in mind the kind of year Lennar's had. I mean, even now with this sell off today, that stock's still up nearly about 70% this year.

Of course, you know, homebuilders we talk about a lot and just the powerful moves these have had DR Horton and KB Home. And I guess the-- listen, you look at this print though in particular, they did report better than expected orders it looks like. It looks like they forecast about 80,000 deliveries in fiscal '24. That's about 10% higher from what I'm reading versus what got delivered in '23, but it sounds like we can pin that disappointment on the gross margin.

JULIE HYMAN: Yeah and it looks like what they did was they sacrificed gross margin to push that order growth perhaps. So is that still going to happen? Some commentary from the call that was interesting, the company saying that extreme use of incentives looks like a thing of the past.

So maybe that's a little bit of a signal to the Street that margins might get a little bit better here. So we'll see what happens from this trajectory. Obviously, also rates going down is something that eventually has got to help the home sales picture.