Skip navigation Scroll to top
Scroll to top

LGT Navigator: Chip manufacturers suffer under Huawei verdict

May 21, 2019

The US government blacklists Chinese telecommunications supplier Huawei.

After the US Department of Commerce put Huawei on a "black list", chip manufacturers such as Infineon (-4.8%), ASML (-6.3%), AMS (-13.4%) and STMicroelectronics (-9.1%) were among the biggest losers at the start of the week, each with discounts of a good four percent. Due to the verdict of the US government, Huawei is now prohibited from doing business with US companies. As a result, the Google parent company Alphabet is said to have discontinued parts of its business relations with the Chinese network supplier. Huawei will thus be cut off from important Google technologies with its smartphones. Due to the US sanctions, Huawei will no longer be able to sell future models with pre-installed Google services, which is likely to make the products less attractive.

Navigator_Huawei

Trade dispute remains major concern

On the international capital markets, the trade dispute remains the focus of interest. After focusing mainly on the conflict between the US and China in the past, trade relations between the US and Europe are likely to become more and more central. Although the temporary postponement of a Washington decision on possible punitive tariffs against European carmakers has eased some of the pressure, relations remain strained and uncertainty for investors remains high. Meanwhile, a new survey conducted by the EU Chamber of Commerce in Beijing among its members shows that more than one in three European companies operating in China is already experiencing negative consequences from the punitive tariffs imposed.

Tensions with Iran cause oil prices to rise

Oil prices recovered at the start of the week after US President Donald Trump adopted a much more aggressive tone towards Iran. Trump made an unmistakable threat following a missile attack in Baghdad near the US embassy. Meanwhile, a senior Iranian military made it clear that Iran did not want war. In addition to the tense situation in Iran, indications of an extension of OPEC production cuts until the end of 2019 supported the oil price. A total reduction of 1.2 million barrels per day was decided last December and will expire in June.

Economic Indicators May 21

MEZ Country Indicator Last
11:00 Global OECD World Economic Outlook
16:00 Eurozone Consumer Confidence -7.90
16:00 US Existing Home Sales (y/y, in percent) -4.90

Earnings Calendar May 21

Country Corporate Period
CH Sonova Year
US Home Depot Q1

 

 

Follow us on TwitterFacebook or LinkedIn, where we inform you about latest market developments and LGT News. Further informationen is available on: LGT Social Media.

LGT Research Publications subscription 

Imprint
Publisher: LGT Bank (Switzerland) Ltd., Glärnischstrasse 36, CH-8027 Zurich
Editor: Alessandro Fezzi, +41 44 250 78 59, E-Mail: lgt.navigator@lgt.com
Source: LGT Bank (Switzerland) Ltd.

Risk Disclosure (Disclaimer)
This publication is an advertising material / marketing communication. This publication is for your information only and is not intended as an offer, solicitation of an offer, or public advertisement to buy or sell any investment or other specific product. Its content has been prepared by our staff and is based on sources of information we consider to be reliable. However, we cannot provide any confirmation or guarantee as to its being correct, complete and up to date. The circumstances and principles to which the information contained in this publication relates may change at any time. Information that has been published should therefore not be understood as implying that no change has taken place since its publication or that it is still up to date. The information in this publication does not constitute an aid for decision-making in relation to financial, legal, tax-related or other consulting matters, nor should any investment decisions or other decisions be made on the basis of this information alone. It is recommended that advice be obtained from a qualified expert. Investors should be aware that the value of investments can fall as well as rise. Positive performance in the past is therefore no guarantee of positive performance in the future. Investments in foreign currencies are also subject to fluctuations in exchange rates. We disclaim all liability for any loss or damage of any kind, whether direct, indirect or consequential, which may be incurred through the use of this publication. This publication is not intended for persons subject to legislation that prohibits its distribution or makes its distribution contingent upon an approval. Any person coming into possession of this publication shall therefore be obliged to find out about any restrictions that may apply and to comply with them. In line with internal guidelines, persons responsible for compiling this report are free to buy hold and sell the securities referred to in this report.

Impressum
Herausgeber: LGT Bank (Schweiz) AG, Glärnischstrasse 36, CH-8027 Zürich
Redaktion: Alessandro Fezzi, +41 44 250 78 59, E-Mail: lgt.navigator@lgt.com
Quelle: LGT Bank (Schweiz) AG