U.S. equities fell hard on Monday, with the Dow Jones Industrial Average having its first close below its 200-day moving average since the summer of 2016. This comes amid deepening trade rifts between the United States and its trading partners — especially China — as President Trump continues to hammer on the issue.
The latest reports say the Trump Administration is preparing to tighten its policy on tech-sector investment restrictions with an aim towards preventing China from stealing U.S. technology. Beijing has responded, with reports Chinese president Xi has told various CEOs that “In our culture we punch back.”
The result has a big wave of selling pressure against the one area of the market that has been resolutely steadfast: the mega-cap tech stocks. Here are 7 stocks that are suffering as a result of Trump’s trade war:
7 Trade-War Stocks From the Tech Sector: Amazon (AMZN)
Amazon.com (NASDAQ:AMZN), the stock that just refuses to stop rising, actually suffered a weekly decline last week and was down another 3.4% in trading on Monday. Incredible, I know. Watch for a test of the 50-day moving average to give way to a drop down to its 200-day average — a decline of nearly 20%
The company will next report results on July 26. Analysts are looking for earnings of $2.53 per share on revenues of $53.4 billion. When the company last reported on April 26, earnings of $3.27 beat estimates by $2.02 per share on a 42.9% rise in revenues.
7 Trade-War Stocks From the Tech Sector: Apple (AAPL)
Apple (NASDAQ:AAPL) shares have sliced below their 50-day moving average for a loss of roughly 7% from their recent high, returning to a range that’s been in play since November. The rebound off of the 200-day moving average — spurred by word Warren Buffett had bought a big position in the company — looks vulnerable to fade big now on fears iPhones from China could be hit with tariffs that would impact profitability margins.
The company will next report results on July 31 after the close. Analysts are looking for earnings of $2.18 per share on revenues of $52.4 billion. When the company last reported on May 1, earnings of $2.73 beat estimates by five cents on a 15.6% rise in revenues.
7 Trade-War Stocks From the Tech Sector: Micron Technology (MU)
Micron (NASDAQ:MU) shares have fallen below their 50-day moving average after hitting double-top resistance above the $60-a-share threshold that was first hit back in March. Watch for a decline down to the 200-day moving average as the company sits at the center of possible trade tensions between China and the United States following a profile in the New York Times outlining how the company’s technology was stolen by a Chinese competitor.
The company will next report results on September 25 after the close. Analysts are looking for earnings of $3.32 per share on revenues of $8.25 billion. When the company last reported on June 20, earnings of $3.15 beat estimates by two cents per share on revenue growth of 40.1% from last year.
7 Trade-War Stocks From the Tech Sector: Intel (INTC)
Intel (NASDAQ:INTC) shares continue to decline in the wake of the resignation of its CEO after admitting to a ‘consensual relationship’ with a subordinate. The result is an accelerating decline below the 50-day moving average that’s worth a drop of nearly 12% already. Semiconductors are at the center of U.S.-China trade tensions on fears they could be a national security vulnerability — risking the creation of “walled gardens” of semiconductor suppliers.
The company will next report results on July 26 after the close. Analysts are looking for earnings of 95 cents per share on revenues of $16.7 billion. When the company last reported, earnings of 87 cents per share beat estimates by 15 cents on an 8.8% rise in revenues.
7 Trade-War Stocks From the Tech Sector: Nvidia (NVDA)
Nvidia (NASDAQ:NVDA) shares lost their 50-day moving average, falling below overhead resistance near the $250 level going back to January. Watch for a drop down to the 200-day moving average, a level that hasn’t been tested since early 2016, as demand hype from things like bitcoin mining fade and investors focus on the risk of profit taking after a 1000% rise over the last three years.
The company will next report on August 9 after the close. Analysts are looking for earnings of $1.84 per share on revenues of $3.1 billion. When the company last reported on May 10, earnings of $2.05 beat estimates by 39 cents on revenue growth of 65.6%.
7 Trade-War Stocks From the Tech Sector: Netflix (NFLX)
Netflix (NASDAQ:NFLX) shares were down nearly 6% in trading on Monday, dropping back below the $400-a-share threshold and setting up a decline down to the 50-day moving average. The centerpiece of the company’s growth strategy has been international expansion, particularly into the virtually untapped Chinese market. In a 2016 letter to investors, the company said:
“On China, we are continuing discussions but have no material update on our approach or timing. Whatever we do will have only a modest financial effect in the near term.”
So in the near term, NFLX will likely not be affected very much by trade war. It’s still seeing explosive growth in international subscriber numbers, but eventually, it will need to expand into China to continue that growth.
The company will next report results on July 16 after the close. Analysts are looking for earnings of 81 cents per share on revenues of $3.9 billion. When the company last reported on April 16, earnings of 64 cents per share beat estimates by a penny on a 40.3% rise in revenues.
7 Trade-War Stocks From the Tech Sector: Alphabet (GOOGL)
Alphabet Inc (NASDAQ:GOOGL) shares are falling away from triple-top resistance near $1,200 setting up another test of the 200-day moving average which held in February, March, April, and May. While the company is by far a software/web company, recent reports of efforts to sell its hardware in China exposes it to the deepening trade rift.
The company will next report results on July 23 after the close. Analysts are looking at earnings of $9.61 per share on revenues of $32.3 billion. When the company last reported on April 23, earnings of $9.93 per share beat estimates by 65 cents on a 25.8% rise in revenue
Anthony Mirhaydari is the founder of the Edge (ETFs) and Edge Pro (Options) investment advisory newsletters. Free two- and four-week trial offers have been extended to InvestorPlace readers.
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