Advertisement
Features

New front in trade war spooks stocks

The White House’s move against Huawei, the world’s second-biggest smartphone maker, takes the trade war into uncharted territory.

948_MW_P04_Markets
Blacklisting Huawei may lead to a tech cold war

"Here be dragons," says Christopher Beddor on Breakingviews. The White House's move against Huawei, the world's second-biggest smartphone maker, "takes the trade war into uncharted territory". The US president has added Huawei to an export blacklist on national security grounds. The order prompted Google to ban the firm from accessing some features on its Android operating system. The move follows prolonged attempts by American officials to persuade allies, including Britain, to bar Huawei from involvement in their 5G networks and potentially stokes "a new tech cold war". Stocks were unnerved at the thought. Domestic Chinese equities slipped by 4% in three days; America's S&P 500 has lost 3% from its record high.

Advertisement - Article continues below

Huawei has doubled its global share of the smartphone market in the last two years, says Jim Armitage in the Evening Standard. The latest escalation could trigger a potentially "devastating crisis" for the maker of one in five of the world's handsets. Google's move to sever ties means new Huawei phones will not have access to security updates or features such as Google maps. That might give Trump more leverage with Beijing, but it also denies consumers access to China's "cheaper, better technology".

Why now?

A black cloud over markets

This is likely to create pervasive uncertainty and volatility over the next few months, although central bank action may limit the downside for stocks. The prospect of the Fed coming to the rescue at the first sign of trouble has kept US markets buoyant, says Sarah Ponczek on Bloomberg. News of weak US retail sales actually triggered stockmarket gains last week. "Bad news is good again. As long as it doesn't involve China."

Advertisement
Advertisement

Recommended

How long can the good times roll?
Economy

How long can the good times roll?

Despite all the doom and gloom that has dominated our headlines for most of 2019, Britain and most of the rest of the developing world is currently en…
19 Dec 2019
The British equity market is shrinking
Stockmarkets

The British equity market is shrinking

British startups are abandoning public stockmarkets and turning to deep-pocketed Silicon Valley venture capitalists for their investment needs.
8 Nov 2019
Share tips of the week
Share tips

Share tips of the week

MoneyWeek’s comprehensive guide to the best of this week’s share tips from the rest of the UK's financial pages.
7 Aug 2020
BP has slashed its dividend – and markets love it
Income investing

BP has slashed its dividend – and markets love it

BP has bowed to the inevitable and cut its dividend in half – and its share price promptly rose. John Stepek explains what it means for shareholders …
4 Aug 2020

Most Popular

Don’t despair on dividends – these companies could be set to bring them back
Income investing

Don’t despair on dividends – these companies could be set to bring them back

The value of dividends paid out by UK stocks has plummeted this year as companies “rebase” their payment policies. But things could soon start to look…
6 Aug 2020
Platinum: the precious metal that looks set to play catch-up with silver and gold
Silver and other precious metals

Platinum: the precious metal that looks set to play catch-up with silver and gold

Gold and silver continue to soar, but there's still time to get in. And there's another precious metal that looks set to go on a bull run too, says Jo…
7 Aug 2020
Eagle Lightweight GT: the reincarnation of the E-type Jag
Toys and gadgets

Eagle Lightweight GT: the reincarnation of the E-type Jag

Jaguar’s classic E-type sports car has been reinvented for the modern age. The result – the Eagle Lightweight GT – is a thing of beauty.
7 Aug 2020