More on Bloomberg’s spy-chip article, this time from an IT professional:
“One of the things to consider with the Amazon/Apple rebuke of the Bloomberg article is the relationship Amazon and Apple have with Chinese officials.
“Unfortunately, both organizations are highly dependent on favorable relations with China and success is maintained when you don’t bite the hand that feeds you.”
Fair point. Amazon and Apple have a lot to lose by implicating China.
A second Bloomberg article reports on a chip found in a telecom firm’s server; our semiconductor engineer who contributed yesterday says the following:
‘Unlike the previous report, I find this one to be much more believable. It would not even require any sort of collusion at the assembly plant.
‘In this case the part passes as an ethernet connector — lots of room inside, connects straight to the ethernet points designed for that purpose. So the parts might be substituted for a regular parts shipment and just assembled as part of the workflow.
“So where are these parts being used? First point of attack has to be large servers used in corporation and government server farms. All kinds of good data to get at there.
“Players here could be nation state agencies, large corporations or big NGOs. Many places around the world could possibly build such a part.”
Who has the most to gain from this scheme — politically and economically?
We appreciate your feedback.
Your Rundown for Thursday, October 11, 2018…
Fed Takes the “Punchbowl” Away?
Yesterday the markets experienced a bloodletting of sorts.
The DJIA dropped 830 points, the worst drawback since February.
The S&P 500 experienced its first five-day-straight slump since December, 2016.
It was also the worst day for FAANG stocks since August, 2011.
We’ll throw Apple in for kicks. Like Google (Alphabet), shares lost 4.6%.
To put a dollar figure on the losses, that’s $172 billion in market cap.
So the overachieving sectors FANGs are rolled into have experienced a sell-off. The health sector is now the top-performing U.S. sector.
Perusing the financial news this morning, analysts are pinning the broad market rout on higher interest rates. President Trump agrees. He called the Fed “crazy” for hiking interest rates.
“We are witnessing the repercussions in the markets as the Fed takes the punch bowl away from the party,” says Charlie Ripley, an investment strategist at Allianz Investment Management.
The comparison’s apt. Rising interest rates have a lot of investors sobering up. Investor sentiment’s shifted. We’ll see whether that’s a long-term trend.
And as investors get sober, they’re questioning if tech’s just too risky and overvalued.
What’s odd is money pulled out of tech didn’t go into the usual safety plays. Staples and utilities got swept away yesterday, too. Bonds and gold weren’t attracting cash either.
It seems investors are taking a wait and see approach, sidelining cash until further notice. Cash might be moving into the mattress.
What might help the markets? The Fed could soften their approach and the U.S. and China could come to terms on the trade war. Pipedreams, maybe.
As an investor, for now, it’s might be time to get defensive.
Market Rundown for Thurs. October 11, 2018
S&P 500 futures are down 11 points to 2,774.59.
Oil is down $1.28 to $71.89.
Gold’s actually getting a little pop this morning; it’s up $23.20 to $1,216.50.
Bitcoin…not so much. It’s lost $311.63 to $6,269.44.
Have a great day. We’ll talk tomorrow.
For the Rundown,