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Huawei and the Fall of Stocks


The technology sector and its future are beginning to look murky, arising from the recent US and China rift. Stocks on tech decline, as many major and significant companies, pulled out and cut off its relationship with Huawei. Lately, US made plans of pulling out Huawei Technologies. Huawei is considered as one of the leading China mobile phones developer. The recent pull out lead to developments in the stock market, which made a turn for the worse. Equity markets fell, and a looming trade war is happening between the US and China. Europe, as well as wall street,  is starting to fear the impending trade war.

But the effects of the recent pullout isn’t just felt within the territory of the US, as Europe and Japan are beginning to experience a fall in their tech stocks. However, many tech investors outside the US remain hopeful that the rift would later be settled.

Other Companies are Pulling Out

Luckily, shares in Asia managed to save itself, and reverse the loss it experienced a few weeks back. Washington made a call to lift the tariffs in North America. However, the Chinese don’t share the same sentiment. To add salt to the trade war, China began accusing the US of having “extravagant expectations” in their trade deal. This emphasized the rift between China and the US, and the global sector has been aware of the US’s attitude towards Huawei.

Other tech companies followed the steps of the US. Apple’s primary supplier for its face ID tech, Lumentum Holdings Inc., already discontinued its shipments from Huawei. Alphabet’s Inc also suspended its business with Huawei. Infineon, on the other hand, a German chipmaker, denied that it terminated its shipments with Huawei despite speculations.

Because of the recent pull of the US and other tech companies from Huawei, the equity market is seeing a slower sector. Stocks derived from a technology play an essential role in the equity market, and a slowdown would affect the sentiments of investors. Michael Arone, the chief investment strategist at State Street Global Advisors in Boston, says, “The volatility that we see today is a direct result of President Trump’s threats to Huawei. The challenge is, there are no near-term trade meetings to provide a positive catalyst to this discussion,” he said.

The Fall of the Tech Stocks

Both Apple and Lumentum experienced a fall on their shares. However, T-Mobile US and Sprint Corp experienced some good news as its shares went up after it decided to go with their merger amounting to $26 billion. The Federal Communications Commission heads to support the planned merger and shows an excellent chance of its approval.

Investors are still waiting for the next step the US will undertake in the US and China rift. The dollar, however, isn’t too affected, as it only saw little changes from the previous week’s big move. Investors are waiting to make their next big move, ensuring to do the same after the US-China trade negotiations conclude.

The currency saw some weakness in its value, with the US, euro, and Japanese yen experiencing the direct effect. The dollar fell by 0.0%, while the euro ranges somewhere between 0.08% to $1.1165. Many investors and analysts are hopeful for this coming week, as the feds would soon release its monetary policy. Many investors hope that this new release would be the highlight of their week, and it won’t show any negative surprises.

In other markets, prices in oil began to increase, showing one of the recent highs it experienced in weeks. The Organization of the Petroleum Exporting Countries plans on cutting down production cuts so that it can maintain and help boost the prices.