What happened
Shares of Atlassian (NASDAQ: TEAM) gained 10.5% in November of 2018, according to data from S&P Global Market Intelligence. The maker of project management tools for both enterprises and small businesses didn’t have much market-moving news to share last month, and a bullish analyst note at the middle of November went largely unheralded. But the stock jumped 13% higher over the last three trading days of the month, when trade tensions with China appeared to relax.
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So what
The upcoming G-20 meeting between Chinese and American officials led markets generally higher that week, and Atlassian’s stock rose faster than most. China is not a supremely important market for this company — the entire Asia-Pacific region added up to just 11% of Atlassian’s first-quarter revenues — but high-flying growth stocks are often sensitive to changes in the global economy. Having suffered a sharp China-related drop as recently as November 19, Atlassian investors breathed a huge sigh of relief as the Chinese trade war rolled toward a solution.
Now what
The G-20 meeting did not actually solve anything, merely pushing “pause” on further tariff escalations until March 1, 2019. Atlassian reacted just as you’d expect to that news, falling 9% in the first few days of December.
All told, Atlassian’s stock is trading 82% higher in 2018 — and 14% below its 52-week highs. Volatility, thy name is Atlassian. That being said, Atlassian backs up its lofty valuation with tremendous growth. Now, if only the politicians could settle their differences…
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Anders Bylund has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Atlassian. The Motley Fool has a disclosure policy.
