21 May

Why Tech Stocks Had to Fall Sooner or Later

WRITTEN BY Sanmit Amin

Tech stocks slumped 1.5% on May 20

Tech stocks underperformed again on May 20 after the trade spat escalated, with Huawei in the eye of the storm. The tech-heavy NASDAQ Composite Index fell 1.5% on the day to 7,702. The index is now down over 6% from the highs it made earlier this month.

Google and Qualcomm, among others, saw steep losses after rumors that they were cutting access to Huawei after the Trump administration put the Chinese company on the trade boycott list.

Why Tech Stocks Had to Fall Sooner or Later

Apple (AAPL) stock plunged more than 3% on investors’ fears that China would retaliate with restrictions on the tech giant, which has significant exposure in the country.

Meanwhile, the tariffs are likely to squeeze the profit margins of many tech companies. Those with higher exposures to China are expected to be the most affected.

The trade war has overshadowed the fact that the global economy is worsening

For most of the year, investors have also been neglecting to address the fact that the global economy has been slowing down. However, stocks have mostly risen due to assurances from the Fed that rates will remain low.

Most of the returns in the US markets this year have been on the back of multiple expansions and not earnings growth, indicating that either stocks have to correct sooner or later or earnings need to catch up.

We’ve been seeing more signs of a slowdown in the current quarter, but the slowing economy has been overshadowed by the escalation of the US-China trade war, which threatens to put the brakes on economic growth.

The ten-year Treasury yield is currently sitting at 2.42%, its lowest point since the start of 2018. Its value has risen as investors look for safe havens.

Latest articles

This year, Pfizer (PFE) stock has fallen 0.34% and Bristol-Myers Squibb (BMY) stock has fallen 6.48%. Both companies are focused on strengthening their position in the high-growth oncology and immunology markets. Let's take a closer look at each.

Walt Disney’s (DIS) latest movie, Toy Story 4, has reportedly broken records in the opening weekend with $118 million in sales. However, the opening weekend collection was behind analysts’ expectations of at least $150 million in the first weekend.

24 Jun

Will Home Depot’s Upward Momentum to Continue?

WRITTEN BY Rajiv Nanjapla

As of June 21, Home Depot (HD) was trading at $209.39, which implies a rise of 9.7% since the announcement of its first-quarter earnings on May 21. Also, the company was trading at a premium of 32.4% from its 52-week low of $158.09 and a discount of 2.8% from its 52-week high of $215.43.

On June 21, Aurora Cannabis (ACB) made an announcement that indicated that it will move towards higher margin vape products. In addition, the company also believes concentrates and edibles will command higher margins. In anticipation of this development, the company announced the expansion of its facility to capitalize on growth related to these segments.

Shares of Mondelēz International (MDLZ) are scaling new heights thanks to its stellar gains so far this year. Mondelēz stock is up 38.0% on a YTD (year-to-date) basis, and it closed at $55.25—just a shade lower than its 52-week high of $55.71—on June 21.

24 Jun

How Long Will Facebook's Libra Fuel Bitcoin Rally?

WRITTEN BY Mayur Sontakke, CFA, FRM

Ever since the news about Facebook’s (FB) cryptocurrency project broke, Bitcoin has rallied on the hope that Facebook’s entry in the space will help make cryptocurrencies mainstream. Facebook’s cryptocurrency will be called Libra and will be governed by an association with 28 founding members across industries.