Trump says U.S. "open for business" amid reports about blocking GE engine sales to China
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. U.S. 'OPEN FOR BUSINESS': President Trump said on Tuesday via Twitter that the U.S. is "open for business" and that he wants China to buy U.S. jet engines. "The United States cannot, & will not, become such a difficult place to deal with in terms of foreign countries buying our product, including for the always used National Security excuse, that our companies will be forced to leave in order to remain competitive. We want to sell product and goods to China and other countries. That’s what trade is all about. We don’t want to make it impossible to do business with us. That will only mean that orders will go to someplace else. As an example, I want China to buy our jet engines, the best in the world. I have seen some of the regulations being circulated, including those being contemplated by Congress, and they are ridiculous. I want to make it EASY to do business with the United States, not difficult. Everyone in my Administration is being so instructed, with no excuses… THE UNITED STATES IS OPEN FOR BUSINESS!," the tweets read.
His tweets followed reports saying the U.S. government was considering whether to stop General Electric (GE) from continuing to supply engines for a new Chinese passenger jet. The potential restrictions on the engine sales - possibly along with limits on other components for Chinese commercial aircraft such as flight control systems made by Honeywell International (HON) - are the latest moves in the battle between the world's two largest economies over trade and technology, Reuter's Karen Freifeld and Alexandra Alper wrote.
2. CHINA'S ACCESS TO CHIP TECHNOLOGY: Commerce Department is proposing restrictions requiring foreign companies to obtain licenses in order to make chips for Huawei using U.S. equipment, The Wall Street Journal's Asa Fitch and Bob Davis reported earlier this week. The proposed rule comes as the Trump administration looks to cut off China's access to the U.S. semiconductors, one of China's largest imports from America.
The proposed changes could also harm U.S. manufacturers of semiconductor equipment, like Applied Materials (AMAT) and Lam Research (LRCX), according to the report. Huawei suppliers include Micron Technology (MU) and Western Digital (WDC), while makers of optical components, including Oclaro (OCLR), Acacia Communications (ACIA), NeoPhotonics (NPTN), Lumentum (LITE), and Finisar (IIVI), have previously reacted negatively to headlines regarding U.S. enforcement actions and allegations against China's Huawei.
3. MANAGED CARE: Stephens analyst Scott Fidel pointed out in a note to investors on Thursday that Managed Care Organization stocks had bounced after the Iowa caucus. He also noted that it "was a rough initial showing" for Michael Bloomberg in his first Democratic debate. Fidel will be looking at the near-term price action in MCO stocks "to reveal how much of the uplift in share strength since Iowa related to market sentiment that Bloomberg's prospects were accelerating." While he contends that a second term for Donald Trump would be a "best-case scenario" for MCO stocks, Fidel also argues that a nomination of Bernie Sanders "creates Black Swan risk that would not be so starkly present" with Bloomberg. MCO stocks Anthem (ANTM), Centene (CNC), CVS Health (CVS), Humana (HUM), Molina Healthcare (MOH) and UnitedHealth (UNH) were all lower on Thursday following the Democratic debate.
4. DATA BREACH: The Defense Information Systems Agency, or DISA, which is responsible for secure White House communications, said personal data may have been compromised "in a data breach" that occured between May and July 2019, according to Reuters' Christopher Bing, citing a letter sent on Thursday to individuals whose data may have been taken. The warning letter viewed by Reuters did not indicate what specific part of DISA's network had been breached or identify which other individuals may have had their data compromised, the report noted. Publicly traded companies in the cybersecurity space include Barracuda (CUDA), Check Point (CHKP), F5 Networks (FFIV), FireEye (FEYE), Fortinet (FTNT), Imperva (IMPV), Palo Alto Networks (PANW), Proofpoint (PFPT) and Qualys (QLYS).
"Week in Review" is The Fly's weekly recap of its recurring series of "Trump Effect" exclusive stories.