Heard on the Street: The U.S. economy may be more vulnerable to higher levies on Chinese imports than the White House thinks
President Trump meets with China President Xi Jinping at the start of their bilateral meeting at the G-20 leaders summit in Osaka, Japan. Photo: kevin lamarque/Reuters By Spencer Jakab June 29, 2019 8:08 am ET The Fourth of July fireworks will come a few days early this year for traders.
The most obvious winners from the summit’s aftermath will be U.S. technology companies with direct or indirect exposure to embattled Chinese telecom giant Huawei Technologies Co. In remarks following the meeting, Mr. Trump said that U.S. companies would be able to sell equipment to Huawei that has “not a great national-emergency problem with it.” Though the U.S. and other western nations may forgo buying allegedly compromised Huawei equipment, software and chip companies may keep supplying it.
Stocks overall are likely to rise on the benign outcome of the talks. The question, though, is whether the gains will last, even for the sectors most likely to benefit. U.S. equity markets just closed out their best June in over 60 years and their best first half in over 20 largely on expectations that the Federal Reserve is set to come to the rescue with rate cuts. June began with a surprisingly weak U.S. payrolls number that, coupled with trade concerns and a slew of tepid U.S.
Even chip stocks and agricultural commodities could give back gains. The Philadelphia Semiconductor Index is up by nearly 28% this year despite the Huawei tensions amid mixed news such as weakness in data-center demand. In the longer run, U.S. threats to cripple telecommunication equipment companies ZTE and Huawei have given China a strong incentive to become self-sufficient in key technologies, which could ultimately hurt the business prospects of U.S. tech companies.
South Africa Latest News, South Africa Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Trump, Xi set for high-stakes trade war talks in JapanU.S. President Donald Trump and Chinese President Xi Jinping are set for a high-stakes meeting that could salvage trade talks or plunge the world’s two largest economies into a deeper trade war
Read more »
Trump and Xi agree to further trade talks at high-stakes meeting in JapanU.S. President Donald Trump and Chinese President Xi Jinping agreed on Saturday to proceed with trade negotiations after a series of escalations to their nations' trade war threatened to disrupt the global economy.
Read more »
French market watchdog to London: stop trading EU shares after BrexitBritain should give investment firms clarity by signalling an end to the trading...
Read more »
Falling U.S dollar could give new shine to emerging market debtPivot to emerging market debt in forecast as global yields vanish
Read more »
There’s a big flaw in stock-market bulls’ logicExpecting the Federal Reserve to aggressively cut interest rates flies in the face of common sense.
Read more »
Russia, Saudi deal shows commitment to oil market stability: NovakRussia's deal with Saudi Arabia on crude production cuts shows their commit...
Read more »