|Day's Range||44.10 - 47.30|
Yahoo Finance’s Dan Howley joins Seana Smith on The Ticker to break down how the coronavirus has impacted big tech.
Tom Essaye, founder of The Sevens Report, and Stephen Guilfoyle of Sarge 986 LLC joins Yahoo Finance’s Alexis Christoforous, Brian Sozzi and Julie Hyman to discuss the latest market action on The First Trade.
A coronavirus stock market correction kicked in. The Dow Jones had its worst week in years. Microsoft, Mastercard warned. Disney CEO Bob Iger is out.
The abandonment of a show as big as Mobile World Congress stings economically for the host city, mobile industry and entrepreneurs from across the globe who attend in hopes of doing deals. And it could just be the beginning.
Wall Street's main indexes were on track for their worst week since the 2008 global financial crisis on Friday as the selloff deepened on fears that the fast-spreading coronavirus could lead to a recession. The Dow Jones Industrials slumped more than 1,000 points in a volatile session and if the index closes below this level, it would be its fifth 1,000-point decline in history and the third this week. At 1:36 p.m. ET, the Dow Jones Industrial Average was down 493.38 points, or 1.91%, at 25,273.26 and the S&P 500 was down 41.04 points, or 1.38%, at 2,937.72.
Chip stocks and software stock break ranks with the rest of the tech sector on Friday, bouncing back amid a week long bloodbath for the broader U.S. market fueled by fear of the COVID-19 coronavirus.
The rising number of COVID-19 cases and deaths outside of China has led to cancellations of major events, including a two-week shutdown of Tokyo Disney, all gatherings in Switzerland of more than 1,000 people, and caused Facebook, Microsoft, and Workday to withdraw from or cancel events.
Wall Street plunged in a volatile trading session heading into the weekend, extending a steep selloff from last week as the fast-spreading coronavirus raised fears of a global recession. The three main stock indexes pared losses and the Nasdaq briefly turned positive on gains in technology stocks including Microsoft Corp and chipmakers Nvidia and Qualcomm.
Philanthropist Bill Gates on Friday urged wealthy nations to help low and middle-income countries strengthen their health systems in hopes of slowing the spread of the coronavirus, which Gates said has started to behave like a "once-in-a-century" pathogen. The novel coronavirus that first emerged in China and has now spread to 46 countries is much harder to stop than similar viruses that caused the Middle East Respiratory Syndrome (MERS) or Severe Acute Respiratory Syndrome (SARS), Gates wrote. The Bill and Melinda Gates Foundation has already pledged $100 million to fight the outbreak.
First discovered in Wuhan China, COVID-19, better known as the coronavirus, has become worldwide news in the wake of its outbreak. As of this writing, over 2,800 people have had deaths attributed to the coronavirus, the overwhelming majority of which have been in mainland China.
China is suffering a coronavirus epidemic. (Maybe you've heard about it?)At last report, 78,832 patients have been infected in China, and sad to say, COVID-19 hasn't been contained within China. In fact, 54 countries now report infections (up four from yesterday). South Korea has the most cases outside of China... and is where today's story begins.In a report just out from Mizuho Securities in Japan (coronavirus infections: 214), managing director Vijay Rakesh explains how COVID-19 concerns are spreading outside the China epicenter to South Korea, Taiwan, Italy, Iran, and Japan, and impacting normal functioning of the global supply chains in PCs, server/data center, handsets, and memory.Not all the news is bad. China's swift imposition of quarantines on upwards of 60 million of its citizens have slowed the disease's expansion in that country and, from Rakesh's perspective at least, "China is slowly returning to normal."But is it a new normal?Between official quarantines and citizens fearful of going out in public, Rakesh notes that China is seeing "strong" growth in "e-commerce" and also "online gaming." Apparently, people are using the former to get access to supplies without leaving their apartments, and using the latter to while away the time while the epidemic burns itself out. In the analyst's opinion, this is going to translate to strength in sales of graphics processing units (GPUs) manufactured by companies such as NVIDIA (NVDA) and Advanced Micro Devices (AMD), of PCs software sales by Microsoft (MSFT), as well as better revenues for online gaming companies such as Tencent (TCEHY).And all that makes sense. We just wouldn't extrapolate the short-term activities Chinese citizens are taking whilst "cocooning" and hiding from coronavirus into long-term trends -- or even necessarily a quarterly spike in sales for any of these companies. While the temptation may be strong to seek out a silver lining around the dark storm clouds looming over the market this week, make no mistake: The situation looks grim. And it's going to take a whole more than a few online take-out orders to justify the 60 P/E ratio at NVIDIA -- much less the 196 P/E ratio at AMD.The analyst's suggestion that Microsoft and Tencent might be worth a look, on the other hand, seems a little more sane at valuations of 33x and 32x earnings, respectively -- but even those two are not exactly "cheap."Meanwhile, next door in South Korea, Rakesh seems to think that things will get worse before they get better. He notes, for example, that Samsung recently temporarily closed its Gumi Galaxy Z handset factory, which could delay rolling out 5G-capable handsets to the masses. And Samsung won't be the only company affected."It is more difficult to control public movement [in a democracy like Korea] versus the central controlled quarantines in China," after all. For this reason, Rakesh is predicting "major disruptions" in supply chains tied to Korea in March.The situation could improve in the year's second quarter, and in the second half, "as OEMs play catchup to demand." In that longer-term timeframe, Rakesh is suggesting investors check out "cyclical auto and industrial names" such as NXP Semiconductors (NXPI) and ON Semiconductor (ON) to outperform.To find good ideas for semiconductor stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.
Millennials, who vouch for bitcoin democratization, also prefer the world's numero uno cryptocurrency as a form of investment to save for the future.
The Dow tumbled as the market correction intensifies. Tesla and Apple extended big Thursday losses overnight. Beyond Meat plunged on a surprise after-hours loss.
The Zacks Analyst Blog Highlights: Microsoft, Electronic Arts, Activision Blizzard, Take-Two Interactive Software and Nintendo
The Vatican joined forces with tech giants Microsoft and IBM on Friday to promote the ethical development of artificial intelligence (AI) and call for regulation of intrusive technologies such as facial recognition. The three said AI should respect privacy, work reliably and without bias, consider human rights and operate transparently. Pope Francis, who has raised concerns about the uncontrolled spread of AI technologies, gave his backing in a speech read on his behalf at a conference attended by Microsoft president Brad Smith and IBM Executive Vice President John Kelly.
Coronavirus has been the catalyst for the kind of pause in the upward march of Big Tech that was starting to look overdue after a torrid 14 months. The losses have reached 11 per cent to 12 per cent across the board. Apple, with its supply chain vulnerabilities and disproportionate dependence on China, has been hit only slightly harder than Alphabet, which is essentially an advertising company riding the secular shift to digital but still tied to the fate of global consumer demand.
(Bloomberg) -- Baidu Inc. predicted revenue may slide as much as 13% this quarter, joining its fellow technology giants in warning about the impact of the deadly coronavirus.China’s internet search leader forecast a 5% to 13% plunge in sales to between 21 billion yuan ($3 billion) and 22.9 billion yuan in the March quarter, missing an average projection for 23.4 billion yuan. Its U.S.-traded shares slid as much as 1.6% in extended trading.From Microsoft Corp. and Apple Inc. to Alibaba Group Holding Ltd., the world’s largest corporations have either scaled back on projections or warned of a hit to their operations from Covid-19. Apart from the uncertainty of the outbreak, Baidu has been grappling with a slowing home economy and competition from upstarts like ByteDance Inc. that’ve lured advertisers away and depressed marketing rates. Chief Executive Officer Robin Li said it will take time for the world’s No. 2 economy to recover.“The return of economic growth will be a long-term issue after the epidemic, but many new opportunities are emerging,” the billionaire founder told employees in an internal memo obtained by Bloomberg.Certain businesses can thrive despite the epidemic, including online entertainment and education, Li added. Baidu’s Netflix-style unit iQiyi Inc. projected a better-than-expected revenue gain of 2% to 8% this quarter.“The virus has affected consumer spending, so naturally advertisers will want to postpone their budgets,” said David Dai, a Hong Kong-based analyst with Bernstein.Read more: Virus Outbreak Exposes $46 Billion Rift in China’s Tech IndustryIn recent days, anxiety has mounted about the spread of the virus outside of China, where it originated. But Baidu executives on Friday emphasized they remained upbeat about a gradual return to normality.“Business activities have started to pick up as people return to work. At Baidu, our employees are gradually returning to the office, applying strict safety measures,” Chief Financial Officer Herman Yu told analysts on a conference call. “We assume businesses across China will do the same, and that our marketing services will pick up at a faster pace into quarter-end.”Baidu had earlier reported better-than-expected revenue for the quarter ended December, when ad demand stabilized and pressure from competitors eased. To offset stalling growth, it looked to improve its bottom line especially by tightening content costs related to iQiyi. Longer term, the company is investing gains from its core search and news services into divisions like driverless cars and smart speakers.Baidu’s shares rallied after the company reported preliminary revenue for the December quarter that beat the highest of analysts’ estimates, but that gain’s mostly been erased since the epidemic triggered a broader selloff of Chinese stocks. The company has been surpassed in market value by rivals like Meituan Dianping and NetEase Inc. after shedding more than $11 billion last year.“For the majority, or probably all of the industries who advertise on us, those kinds of demand don’t disappear -- they’re just postponed,” Li said on the call Friday. “If you plan to marry, you’ll still get married. If you plan to buy a car, you’ll still buy a car. If you plan to become prettier, you’ll still go for cosmetic surgery. This kind of demand will come back after the epidemic ends.”To contact the reporter on this story: Zheping Huang in Hong Kong at firstname.lastname@example.orgTo contact the editors responsible for this story: Edwin Chan at email@example.com, Colum MurphyFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
IBM and Microsoft have signed an “ethical resolution” with the Vatican to develop artificial intelligence in a way that will protect the planet and the rights of all people. The pledge, called the “Rome Call for AI Ethics”, will be presented on Friday morning to Pope Francis by Brad Smith, the president of Microsoft, and John Kelly, IBM's executive vice-president, as well as Vatican officials and Qu Dongyu, the Chinese director-general of the UN Food and Agriculture Organisation.
(Bloomberg) -- Dell Technologies Inc. gave a profit forecast that fell short of Wall Street estimates, in a sign that weaker corporate demand for personal computers will take a toll on the hardware giant.Profit, excluding some items, will be $5.90 to $6.60 a share in fiscal 2021, Chief Financial Officer Tom Sweet said Thursday during a conference call. Analysts, on average, projected $6.72, according to data compiled by Bloomberg.Dell expects $92 billion to $95 billion in fiscal 2021 revenue. The sales midpoint topped the average analyst estimate of $93.1 billion. A surge of corporate upgrades to PCs that has fueled robust demand will probably end in the second half of the fiscal year, Sweet said.Chief Executive Officer Michael Dell has sought to leverage the different parts of his empire to sell clients higher-value packages of hardware and software. But global economic issues, including trade conflicts, the past few months have slowed sales of equipment for data centers, particularly in China. Sweet said server demand would bounce back during the year, which will help boost the company’s overall revenue.Unlike competitors such as Microsoft Corp. and HP Inc., Dell didn’t account for any economic effect from the coronavirus outbreak in its forecast.“I didn’t think it was appropriate to quantify, because I’m not sure we know the full impact,” Sweet said in an interview. “We’ve been moving production and parts around. Are we at full capacity? No. We’re navigating through it based on what we know today.”Dell anticipates adjusted operating income of $8.9 billion to $9.5 billion in fiscal 2021, Sweet said.In the period ended Jan. 31, Revenue increased 1% to $24 billion, the Round Rock, Texas-based company said earlier Thursday in a statement. Analysts, on average, estimated $23.9 billion. Profit, excluding some items, was $2 a share in the fiscal fourth quarter, matching estimates.Sales in the company’s infrastructure solutions unit, which provides equipment to data centers, declined 11% to $8.8 billion. Storage hardware sales decreased 3% and servers and networking gear dropped 19%, highlighting a slower spending environment among large corporate clients.The personal computer division gained 8% to $11.8 billion in the quarter. Commercial sales rose 10% due to corporate clients upgrading their computers to adopt Microsoft’s Windows 10 operating system. Revenue from consumers climbed 4%.Shares fell to a low of $40.40 after closing at $43.56 in New York. The stock has declined 23% in the past 12 months.Dell said it repaid about $1.5 billion of gross debt in the quarter and $5 billion for the year. The company said it has paid down $19.5 billion in gross debt since closing its acquisition of EMC Corp. in September 2016. Dell also announced a $1 billion share buyback program over two years.To contact the reporter on this story: Nico Grant in San Francisco at firstname.lastname@example.orgTo contact the editors responsible for this story: Jillian Ward at email@example.com, Andrew Pollack, Dan ReichlFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.