The S&P 500 gapped down on Friday, as trade tensions flared between the U.S. and China. However, it wasn’t a disastrous session in the stock market today.
The index bottomed in the first 15 minutes of trading and climbed slowly in the afternoon. Ultimately, the S&P 500 ended higher by 0.39% on the day, although it still finished lower by 2.25% this week. Despite Friday’s strong finish, it still has investors a bit worried about the trade situation.
Tensions are escalating between the U.S. and China, as President Donald Trump’s administration is making moves to block Huawei Technologies from global chipmakers. According to CNBC:
“The U.S. Commerce Department said it was amending an export rule to ‘strategically target Huawei’s acquisition of semiconductors that are the direct product of certain U.S. software and technology.’”
Some investors are worried that China could put certain U.S. companies on an “unreliable entity list.” That list could include big-name tech, like Apple (NASDAQ:AAPL), Qualcomm (NASDAQ:QCOM) and Cisco Systems (NASDAQ:CSCO), among others. The country may consider halting its purchases of Boeing (NYSE:BA) aircraft as well.
…Does this rally seem like the best time to get in a trade war?
Movers in the Stock Market Today
Giphy has a new owner — Facebook (NASDAQ:FB). Facebook is buying the company for $400 million and plans to move its GIF library into Instagram. Facebook already accounts for 50% of Giphy’s traffic, while half of that comes from Instagram.
Disney (NYSE:DIS) is officially shutting the doors on its Broadway show Frozen. The company debuted Frozen in March 2018 and while it did well, the uncertainty of when audiences will again return made it the first show on Broadway to call it quits.
The coronavirus outbreak hasn’t affected Ford’s (NYSE:F) timeline for its 2021 F-150 release. The company is ready to start production for the new truck in its Dearborn and Kansas City plants. The 2021 Ford F-150 is set to go on sale this fall.
As businesses begin to reopen, Microsoft (NASDAQ:MSFT) and UnitedHealth (NYSE:UNH) will launch an app to help screen employees. This free app will allow U.S. employers to check employees for novel coronavirus symptoms. Unlike its competitors, like Apple and Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL), ProtectWell does not provide tracking or contact tracing information.
Wondering what companies are seeing a boost thanks to the virus? Look no further than video games. The industry just logged record Q1 sales, hitting $10.86 billion, a 9% rise against last year. The gains were relatively broad in terms of hardware, software, mobile and PC.
Specifically, Nintendo (OTCMKTS:NTDOY) did well with its Switch console. But it’s certainly not bad news for companies like Activision Blizzard (NASDAQ:ATVI), Electronic Arts (NASDAQ:EA) and Take-Two Interactive (NASDAQ:TTWO).
By the way, TTWO reports earnings on May 20.
Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Kenwell is long AAPL.
