US-China trade war concerns
In the previous part of this series, we discussed that the world’s two largest economies, the US (QQQ) and China, are imposing import tariffs on each other’s products. After two rounds of trade negotiation in May, the US (SPY) announced on June 18 that it will impose additional import tariffs on Chinese goods.
Netflix and Facebook’s performances
It has now become important for investors to analyze whether these tariffs will play an important role in some stocks’ performances or not. We have seen that the broader market S&P 500 Index (SPY) witnessed some nervousness in the past four trading days. However, major technology stocks such as Facebook (FB) and Netflix (NFLX) hit record highs during these days. Facebook’s stock price hit a record high of $203.55 on Wednesday, June 20, and Netflix stock hit a record high of $423.21 on Thursday, June 21.
Netflix and Facebook have very little exposure to China. Netflix has no presence in the world’s second-largest economy. Similarly, Facebook has been blocked in China for many years. Thus, these two technology stocks will likely continue to be relatively immune from trade war worries. Netflix has risen 115%, and Facebook has risen nearly 14.5% on a year-to-date basis as of June 22, 2018.
In the next part of this series, we’ll analyze the impact of US-China trade war concerns on Apple.