Broadcom calls out trade fight for guidance cut, Trump voices concerns about defense mega-merger
Catch up on the top industries and stocks that were impacted, or were predicted to be impacted, by the comments, actions and policies of President Donald Trump and his administration with this weekly recap compiled by The Fly:
1. BROADCOM: Shares of Broadcom (AVGO) sank on Friday after the semiconductor supplier lowered its revenue for the fiscal year, saying it sees a "broad-based slowdown" in the demand environment. Along with the earnings report, CEO Hock Tan said the company currently sees "a broad-based slowdown in the demand environment, which we believe is driven by continued geopolitical uncertainties, as well as the effects of export restrictions on one of our largest customers." As a result, Tan said Broadcom's customers are "actively reducing their inventory levels," and that the company is taking a "conservative stance" for the remainder of the year.
2. APPLE: President Trump told reporters on Thursday that Apple (AAPL) CEO Tim Cook "just left our office" during a working lunch with a bipartisan group of state governors, according to Bloomberg. Earlier this week, Debby Wu of Bloomberg reported that if the U.S.-China trade war gets carried away, Apple's primary manufacturing partner has enough capacity to make all iPhones headed for the U.S. outside of China, according to a senior executive at Hon Hai Precision (HNHPF). Hon Hai Precision currently makes most of the smartphones in the Chinese mainland, but is ready to support Apple if it needs to adjust production due to bleaker U.S.-China relations. President Donald Trump has threatened China with new tariffs on about $300B worth of goods, which would exact a punishing tax on Apple's most profitable product in its largest international market.
3. U.S.-CHINA TRADE TALKS: Former top trade advisor to President Donald Trump, Clete Willems, said that a trade deal between the U.S. and China is not likely at the upcoming G-20 meeting, according to CNBC's Kevin Breuninger. "There won't be a deal at the G-20," Clete Willems said in an interview Tuesday with Kayla Tausche at CNBC's Capital Exchange event in Washington.
4. UNITED TECHNOLOGIES, RAYTHEON MERGER: President Trump told CNBC in an interview on Monday that he has concerns about the proposed merger of United Technologies (UTX) and Raytheon (RTN). "Does that make it less competitive?," Trump said, "I don't want to see us having one less company competing for an order."
5. CANNABIS REGULATION: After Washington D.C. lobbyist Michael Esposito, who also works closely with President Trump's administration, spoke at his firm's conference, Piper Jaffray analyst Michael Lavery told investors that he believes cannabis regulation could become a top 2020 election issue. By supporting cannabis, Trump may be able to incrementally broaden his appeal with swing voters without alienating his base, Esposito contended. Though Trump has indicated his willingness to support the STATES Act, his enthusiasm could depend on whether or not Elizabeth Warren, author of the bill, is his opponent, the analyst added. And while Senate Majority Leader Mitch McConnell is a roadblock for legislation in the Senate, Trump could use executive orders between now and the election to show support for the industry, potentially relating to cannabis banking or medical research, Lavery said. Publicly traded companies in the sector include Canopy Growth (CGC), Tilray (TLRY), Aphria (APHA), Aurora Cannabis (ACB), CV Sciences (CVSI), CannTrust Holdings (CNTTF), Cronos Group (CRON), General Cannabis (CANN), India Globalization Capital (IGC), MediPharm Labs (MLCPF) and Zynerba (ZYNE).
"Week in Review" is The Fly's weekly recap of its recurring series of "Trump Effect" exclusive stories.