In the stock market, China risk is reemerging. The U.S. is amending an export rule to block the sale of certain semiconductors to Huawei. This is in addition to prior restrictions on exports of U.S. technology to Huawei.
There is a swift response from China in a tweet by Hu Xijin, the influential editor of the Global Times, which has close ties to the Chinese government. He said China may declare Apple, Qualcomm and Cisco as unreliable entities and stop buying planes from Boeing.
In the previous trade war between the U.S. and China, Apple CEO Tim Cook was successful in keeping both President Trump and the Chinese government happy. The big risk is that Cook may not be able to pull off that feat again.
A lot of money is tied to the S&P 500 Index. Apple carries a heavy weighting in the index, so if Apple is hit more than the other three stocks named in the tweet, the stock market will suffer as a result of poor sentiment.
MacDailyNews Take: There’s always been “China risk.” With the 5G iPhones looming and the very real prospect of effective COVID-19 treatments and eventual vaccine looming, smart investors look to take advantage of buying opportunities (see: AAPL at $212.61 on March 23, 2020).