Trade Deal Is ‘Game Changer’ for Tech Stocks, Wedbush Says
(Bloomberg) -- The partial U.S.-China trade agreement is a “game changer” for technology stocks, at least according to one analyst.
The deal announced by President Trump in the last hour of trading on Friday points to “brighter days” in relations between the two countries and makes it unlikely the U.S. will follow through with the more than $160 billion in tariffs slated to take effect Dec. 15, Wedbush Securities analyst Daniel Ives said. Concerns around those tariffs have resulted in a 10% to 15% discount on U.S. technology stocks by his estimation and the removal could “unleash a ‘risk on’ scenario” into year-end.
Technology stocks had rallied throughout Friday’s session on speculation that some form of trade agreement was near. The shares pared some of those gains as investors realized that several of the thorniest issues, including those related to Huawei Technologies Co., remain unresolved. Huawei, which was blacklisted earlier this year, is a major buyer of U.S. electronic components.
The late pullback wasn’t enough to prevent Apple Inc. from closing at a record and overtaking Microsoft Corp. as the world’s most valuable company. Greater China accounted for about 17% of Apple’s revenue in the fiscal third quarter and is home to a key portion of its supply chain. The Philadelphia semiconductor index also notched a 2.3% gain for the session, its best performance in a month.
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