US stocks traded under pressure, led down by the Nasdaq and technology shares. The hardest hit sector were the semi-conductor sector as Huawei Technologies started to feel the effects of US moves to curb its access to US technology. If US semiconductor companies are restricted on their sales to the world’s second largest phone manufacturer, the landscape of sales could be permanently change. Google announced that it had cut access to some of its Android services on Huawei smartphones and a German chip supplier said it was cutting deliveries to the Chinese giant.
Volatility Moved Higher
The VIX volatility index moved higher but closed well of the session highs. The implied volatility index finished up 2.2% on the session. Sectors were mixed, with technology shares leading the broader markets lower, financials bucked the trend.
Google Suspends Features to Huawei Phones
Google announced on Monday that it would curtail access of specific Android features to company with US requirements that suppliers seek licenses to keep selling to Huawei. Huawei is the second largest phone make in the world only behind Samsung. Its recent surpassed Apple. Additionally, German chip maker Infineon Technologies AG said it was terminating the delivery to Huawei of some components originating in the US. Separately, Qualcomm has suspended shipments to Huawei of its chips, and some employees have been told not to communicate with the Huawei. Qualcomm chipsets are used in certain Huawei smartphone models.
Energy shares were somewhat buoyed due to a rally in crude oil prices on Monday. Oil was higher on Monday after hitting multi-week highs after OPEC indicated over the weekend that it was likely to maintain production cuts that have helped boost crude prices this year. Additional tensions in the middle east, between the US and Iran are keeping prices buoyed.
T-Mobile and Sprint Get Federal Backing
Federal Communications Commission Chairman Ajit Pai announced on Monday that he would back the more than $26 billion combination of cellphone carriers T-Mobile US Inc. and Sprint Corp. after the companies agreed to a package of concessions. The agreement assures one key government approval for the merger, though antitrust hurdles remain. The endorsement is a departure from the stance taken by past FCC leaders who stood in the way of deals that would leave the US wireless market with fewer than 4-nationwide competitors.
Ford to Cut Jobs
Ford said it would be firing 7,000 managers and other salaried employees, which makes up approximately 10% of its white-collar workforce across the globe, as part of a restructuring plan. The cuts, will be completed by August, Ford CEO Jim Hackett said in an email to employees Monday. Most of the reductions are overseas with roughly 2,300 of the job cuts coming from the United States.
This article was originally posted on FX Empire
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