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How China's recovery is expected to boost U.S. companies

Yahoo Finance's Ines Ferre discusses the impact of China's recovery on U.S. consumers, retail sales, and companies, including Starbucks, Disney, and MGM Resorts.

Video transcript

RACHELLE AKUFFO: Investors are keeping a close eye on China's economic data this week as it provides insights on the momentum of its recovery. Month-to-month changes will be a key focus, especially for companies that have enjoyed a lift from China's economic improvements. With more on the influence of the Chinese consumer for US companies, we have Yahoo Finance's Ines Ferre joining us. Hey, Ines.

INES FERRE: Hey, Rachelle, that's right. And investors will be paying close attention to that data that you just mentioned, especially when it comes to retail sales, especially when it comes to sales related to services because remember that the Chinese lockdowns were pretty severe. So now that they have been lifted, companies have been talking about what they've seen with the consumer.

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The consumer spending more on dining out. The consumer spending more when it comes to traveling as well. And we've already seen some companies that have been benefiting from the China recovery and some of these include the ones that you see there on your screen, like Starbucks, Disney, Procter & Gamble, Marriott.

So taking a look at Starbucks, for example, its fiscal second quarter, a big turning point for the company, surprising the Street with China sales up 3%. The Street had expected for those to be lower. Starbucks has been on an expansion plan when it comes to China, increasing its footprint in China. And during their last earnings calls, management talked about the decision to keep opening stores during the pandemic despite disruptions. That decision is paying off.

Moving on to Disney. Disney's international parks have been a bright spot for the company with Shanghai Disney Resort. That's seeing improvement, with management talking in their last earnings calls about higher attendance and improved financial results when it comes to Shanghai.

Also looking at MGM. MGM's results blew it out of the park when it comes to MGM China, where their net revenue increased 130% from the prior quarter. The end of the lockdowns definitely very positive for the company. MGM is up 26% year-to-date, Rachelle.

RACHELLE AKUFFO: All right, great stuff there. Keeping an eye on some of those impacts there, Ines Ferre there for us. Thanks so much.