Beijing had previously refused to buy quantities of U.S. agricultural products and had entered into new soybean contracts with Brazil since the start of the trade war. Scott Kennedy, a senior adviser at the Center for Strategic and International Studies, said the agreement is “very vulnerable to disintegration on both sides.” Moreover, he said, the agreement leaves intact the heart of the issues of Chinese industrial policy. He does not expect the two countries to reach a phase two agreement one day. The combination of accumulated demand caused by the nearly two-year customs struggle and the expected resumption of growth following a trade halt will generate demand for semiconductors. Companies such as Microchip Technology (MCHP) and Qorvo (QRVO), two shares owned by Plumb, Intel (INTC), Nvidia (NVDA), Advanced Micro Devices (AMD), Texas Instruments (TXN) and Qualcomm (QCOM) are expected to benefit. “While in the longer term this is good for corporate bases, I expect short-term price rallies, with some of the profits being returned because the euphoria is tempered,” Hooper said. A big wild card related to all technology stocks and actions is whether the emergence of coronavirus temporarily disrupts supply chains, slows Chinese growth and boosts profits for U.S. technology companies, resulting in strong balances. If this scenario were to arise, MfS Sabel would be a buyer. The reaction of the stock market was timid to say the least. Tangent: Democratic 2020 presidential candidate Joe Biden blasted the deal and said he “wouldn`t really solve the real problems that are at the center of the dispute.” The former vice president told Forbes in a statement: “China is the big winner of Trump`s phase one trade deal with Beijing.
True to form, Trump receives little in return for the considerable pain and insecurity he has imposed on our economy, our farmers and our workers. Investors should not ignore the risks to technology stocks, said Michael Cuggino, president and portfolio manager at the permanent family funds portfolio. Similarly, the outlook is dammming fears that coronavirus could weigh on Chinese growth, which could offset any gains from the first trade agreement. Tech stocks are not the cheapest stocks on the planet after rising more than 60% since the end of 2018. And tech giants like Alphabet (GOOGL), Facebook (FB) and Amazon (AMZN) are not immune to the risk of regulation by American politicians who want to act against their so-called monopoly powers. That`s why stocks didn`t make progress in Friday`s trade news, according to market experts: Crucial ratio: “Is this agreement enough to give the U.S. economy an extra boost? I doubt it, because to get that extra boost, we need companies to increase their investments – and they will stay away until there is more clarity and less uncertainty,” says Sargen.