Yesterday, as in recent weeks, the fate of the many billions traded on the US stock exchanges was decided by the lines of news headlines that came out on the subject of the trade war. Indeed, after the catastrophism over the imposition of new tariffs and the suspension of trade relations of many top US companies, with Huawei, permission from the US Department of Commerce to allow, for ninety days, some activity of the Chinese company with Google and telecom operators, created a new sensation of relief that gave rise to a day of gains that are practically transversal to all sectors and with greater expression in the technology companies most affected by the falls of Monday, the semiconductors, which pulled a 2.05% gain on SOXX, still half the losses from the previous session.
In the indexes, the Nasdaq led to a 1.08% gain, while the Dow Jones was 0.77% higher, despite the good performance of non-technological companies such as Caterpilar and Boeing, the latter benefiting from an indication given by official US aviation authority on the possibility of the fall of the March 737 MAX, have occurred due to birds and not by failure of the airplane equipment. In the S & P500 sectors, refuge assets were clearly weaker and commodity retailers were even the only red group in a session in which export-related firms reported gains above 1%, such as energy, although the WTI crude price has dropped -0.2% to $ 62.99 per barrel.
However, despite the flexibility shown by the US authorities, it is necessary to put some water in the boil, because the decision was also derived to protect the domestic companies themselves, since many consumers would already be trying to deliver their Huawei smartphones to the telecommunications operators locations. Proof of this is that permission for Google to continue to offer update services, for example, only covers existing smartphones and not those entering the market, they will still not have access to updates or services such as Google Play, or whether the "improvement" is very relative, and the rhetoric of confrontation seems to give no respite, yesterday was the turn of the Chinese President to have said that the country faces a new long march and they have to start again, thus indicating that the war be very long, as indicated by Jack Ma, founder of Alibaba.
Another demonstration of strength was the visit of Xi Jinping together with his chief negotiator to the main region producing rare metals, essential for the products of new technologies such as batteries. The fact that China holds the overwhelming majority of world production of these metals and the US does not have these resources was a warning to the ability of China to control the growth of the main world trade sector of the future.
Today's chart is from XLK, the time-frame is Diary
The technology-sector ETF broke down the upward channel (blue lines) that catapulted it to new highs in April, so the same momentum is not expected for the moment if new rises occur.