-So much for the events surrounding Huawei not being important to the “trade issue” which is now a much bigger issue.On Friday,the Commerce Department added Huawei to its restriction list. Implications: 1) US companies restricted from selling to Huawei unless specifically granted a license (waiver) 2) RETALIATION (a lock) 3) supply heads south…demand heads south, and uncertainty.-

-This morning, we are seeing a bunch of very important companies cutting ties with Huawei. This can and will have serious consequences for Huawei, the trade talks and much more. This morning, some of Huawei’s biggest suppliers, Intel, Qualcomm, Xilinx and Broadcom, told their employees they would not supply Huawei till further notice, while Google cut off the supply of hardware and some software services to Huawei smartphones. Huawei bonds have been hitting the skids on this news. All these stocks are hitting the skids.-

-We continue to hear that the U.S. and President Trump have the upper hand in trade talks. If it wasn’t clear that the President was ready to use Huawei as a “chip” in the trade talks, it should now be. But anyone who thinks that China will take this sitting on its rear end has probably been betting the Mets every day. The problem for Huawei is that it is heavily dependent on U.S. semiconductor products and one has to ask the question on whether they can find supplies elsewhere.-

-It looks like the “trade issue” no longer has Huawei as a separate issue. If the President wanted Huawei as part of the negotiations, he now has it…but at what cost? Technology stocks are again bludgeoned this morning. Technology leads the markets both up and down. For a President who watches every tick in the market, not so sure he is going to be thrilled with this latest reaction. We suspect we are going to see a decent amount of technology warnings based on one sentence: “trade and Huawei!”-

-We think tariffs suck but we do understand China was the side that backed away recently from things they had agreed to in negotiations. We only care about outcome and unfortunately, we are not so sure the President understands that this “trade issue” is just starting to heat up and suspect markets will not be too friendly to it.-


2 replies
  1. Avatar
    doug burkizer says:

    And not 1 word from “GLASSHOUSE RUBIO” about the 22+ trillion he and his fellow politicians who throughout the years have indebted the government with. Do as I say, not as I do and “trust us,” say the elected ones. Here’s what our good friend Rubio says according to Marketwatch.

    The main task required of a successful economy, Rubio argues, is “developing productive, long-life capital assets.” In America, that task has always fallen upon the business sector, but American businesses aren’t even trying anymore.

    And if the business sector can’t do it, Rubio warns, then it will fall upon the only other sector with the ability to do it — the federal government.

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