Eq: Tech

(San Francisco)

Amidst all the gloom gripping the markets, there have been a handful of positive publications about 2019. One of them was just put out by Nomura. The bank published a list of 5 tech stocks that might surge in 2019. The call is an ambitious one given the trend of how tech shares have been going. The shares are not all FAANGs either, which makes them more interesting. With further ado, the list is: Google, Amazon, Salesforce, Broadcom, and AT&T.


FINSUM: Amazon seems like a good call to us, especially after its recent declines. The company is going to see increasing margins as it consolidates its dominant position and earns more recurring revenue. Salesforce is also an interesting business.

(San Francisco)

In what comes as an almost apocalyptic announcement for Apple investors, President Trump indicated yesterday that he may impose a tariff directly on iPhones. When asked about whether he would do so, Trump said “Maybe. Maybe. Depends on what the rate is … I mean, I can make it 10%, and people could stand that very easily”. One analyst summarized the development this way, saying “The Street will not be taking this news lightly as with the litany of bad news Apple (and its investors) have seen over the last month … this tariff threat on iPhones out of left field from Trump and Beltway will surely add to this white-knuckle period for Apple”.


FINSUM: We don’t think this will happen. If Trump tried to raise iPhone prices 10% he would likely have a popular revolt (from both sides of the aisle) on his hands. He certainly doesn’t want that.

(San Francisco)

As of today, the FAANG stocks have shed over $1 tn in market cap since their recent highs. The turmoil pulled markets down around 2% across indices, with the Dow seeing the biggest drop at 2.21%. The losses mean once again that indices have lost virtually all their gains for the year. As one CIO put it, “absolute bloodbath for technology stocks”. The selloff seems very forward looking, as investors are quite focused on what might go right and wrong in 2019. The biggest worries seem to be around trade.


FINSUM: Here is a question: why exactly is tech selling off? Apple obviously has its own problems, but those particular issues don’t seem very relevant to Facebook etc. Panic?

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