“The core underlying fear in the eyes of tech investors is around what this move as well as a retaliation move from the Chinese can do to the tech food chain, semi stocks (Intel, Nvidia, etc.), and clearly Apple, which heavily relies on China both on the supply (Foxconn) as well as demand front,” Ives said.
“With worries that Trump potentially plans to enact additional tariffs on Chinese goods down the road if this trade situation spiral further, tech stocks are ultimately caught in the crossfire, with Apple and the semiconductor space remaining front and center and thus weighing on stocks accordingly this morning,” he added.
“He cannot afford to let that slip. He knows it. His political advisors know that. A year from now, we can’t be lower on the stock market than we are, and our economy has to be better. So it’s up to Trump make a deal,” said Siegel, a closely followed market observer whose mostly bullish take on stocks over the years has been correct.
“You can pull victory out of defeat. No one is really going to look at the details,” the Wharton professor said, stressing that the president has a bully pulpit to cast any agreement with China as a victory even if it’s just so-so.
What killed US-China trade talks: A tale of two texts (May 16, 2019)
Apple Inc. (AAPL)
The dispute hinged in part on how the justices would apply a decision the court made in 1977 to the claims against Apple. In that case, the court limited damages for anti-competitive conduct to those directly overcharged rather than indirect victims who paid an overcharge passed on by others.
Noting that they pay Apple – not an app developer – whenever buying an app from the App Store, the iPhone users who brought the case said they were direct victims of the overcharges. Apple said the consumers were indirect purchasers, at best, because any overcharge would be passed on to them by developers.
“Apple has one of the most significant exposures to Chinese exports to the U.S, given final assembly for many of its consumer devices is located in China," Huberty wrote, adding that shifting production from the world’s second-largest economy would be “largely inconceivable and would require heavy investment in robotics and automation" from Apple given that China is “one of the only countries that can provide such a large and low-cost labor force with the expertise in manufacturing and tooling that is required".
The Commerce Department added Huawei and 70 affiliates to its “Entity List” after it concluded that the Chinese company was engaged in activities “contrary to US national security or foreign policy interests”. Inclusion in the list means that a US company, person or government agency purchasing Huawei equipment now requires a specific license “to export, reexport and/or transfer (in-country).”
Starbucks Corporation (SBUX)
The Bear Case For Starbucks $SBUX (May 14, 2019)