President Donald Trump on Wednesday signed an executive order barring US companies from using telecoms gear from sources the administration deems a national security threat.
That action is seen as targeting Beijing and Chinese telecoms equipment maker Huawei. The US government on Wednesday also added Huawei to the so-called Entity List of companies it says undermine American interests. That means US companies may need a license to continue supplying Huawei with crucial components.
For Huawei and its American partners, that could spell trouble. The company relies on US suppliers such as Intel (INTC), Qualcomm (QCOM), Micron (MICR), Microsoft (MSFT) and Oracle (ORCL), according to analysts. Intel and Qualcomm shares are down slightly in premarket trading.
The United States is already locked in a trade war with China. Both sides are still negotiating, but new rounds of tit-for-tat tariffs in the past week have made markets jittery.
2. Markets impact: Investors seem unsure how to read the news. Stocks in Asia were mixed Thursday. South Korea's KOSPI index fell 1.2% and Japan's Nikkei index dropped 0.6%. Meanwhile, Hong Kong's Hang Seng index rose less than 0.1% and the Shanghai Composite jumped nearly 0.6%.
European markets opened lower. Britain's FTSE 100 index dropped 0.1%. Markets in Germany and France shed about 0.1% and 0.2%, respectively.
US stock futures are pointing slightly down, too. The Dow is set to lose 3 points when markets open. The tech-heavy Nasdaq is poised to drop 0.1%.
US stocks have notched two consecutive days of gains. The Dow finished up 0.5% on Wednesday. The S&P 500 rose 0.6%, and the Nasdaq climbed 1.1%.
3. VivaTech kickoff: The startup and tech conference kicks off Thursday in Paris. Thousands of executives, investors and journalists are expected to attend.
IBM (IBM) CEO Ginni Rometty will deliver the keynote address. Also on the schedule Thursday: Alibaba (BABA) founder Jack Ma and Ken Hu, Huawei's deputy chairman.
4. Earnings and economics: Walmart (WMT) is set to release earnings before the US market opens Thursday. Investors will want to know if the company can rein in the massive costs of battling Amazon (AMZN). Executives may also face questions about its UK business Asda after a deal to sell it to Sainsbury's (JSAIY) was blocked by regulators.
Walmart grew its digital business by about 40% last quarter, as it pumped resources into improving its own website, Jet.com and its online store offerings. But that's proven to be an expensive enterprise, pinching profit.
Also on the radar: the Census Bureau releases its housing starts report for April at 8:30 a.m. ET.
No comments:
Post a Comment