Today’s bellwether election in Pennsylvania already was riling up politicos.
Now President Trump has nixed the biggest tech deal ever. That’s stirring up folks not just in Washington, but also on Wall Street, in Silicon Valley and over in Beijing and Shenzhen.
The president has blocked Singapore-based chip giant Broadcom’s
$117 billion hostile bid for American peer Qualcomm
. The move comes after CFIUS — the Committee on Foreign Investment in the U.S. — said the takeover could deliver a boost to a Chinese telecom giant, Huawei, that some see as a possible spy threat.
“He has an adversary list, and he will not work with the adversaries,” says Ron Napier of Napier Investment Advisors in a CNBC interview.
“You have to look at that as being a prelude into very strong U.S. actions against Chinese trade over the next several weeks,” adds the former Salomon Brothers chief Asian economist, for our call of the day.
But isn’t Broadcom based in Singapore?
A Bernstein analyst lays out how the deal would have helped Huawei.
“Given Broadcom’s business practices, the worry is that they will cut investment significantly, particularly in the 5G roadmap, weaken Qualcomm, as well as the U.S. position and allow Huawei, a Chinese company, to take the lead,” says Stacy Rasgon, who covers the semiconductor industry for Bernstein.
Rasgon doesn’t believe that case holds water, but “it’s tough to fight city hall,” he tells CNBC.
The government just declared that Broadcom can’t buy Qualcomm. I have mixed feelings. Broadcom shouldn’t buy Qualcomm (ever!), but this smacks of dictatorship fed by an overblown fear of Huawei.
— saschasegan (@saschasegan) March 12, 2018
Other analysts are also seeing a big impact. And this comes after a tariffs plan with a strong Chinese link.
“This decision hangs a huge ‘not-for-sale’ sign on just about every American semiconductor firm,” Scott Kennedy from the Center for Strategic & International Studies tells Bloomberg. “A Chinese entity doesn’t need to be anywhere near a transaction now in semiconductors for the deal to be nixed.”
Read more: How Broadcom vs. Qualcomm went from hostile bid to Trump blockade
Key market gauges
Futures for the Dow
, S&P 500
are edging higher. The Dow
closed lower yesterday, while the Nasdaq Composite
rose to another record close.
is mostly advancing, after Asia finished mixed. Oil prices
and the dollar index
are gaining, as gold
is little changed. Bitcoin
is changing hands around $9,200.
See the Market Snapshot column for the latest action.
Give yourself a pat on the back if you went all-in on shares in building-materials maker Patrick Industries or mattress company Sleep Number.
They are the top-performing S&P 1500 stocks since March 2009, according to the chart above from Zen Investor (h/t Abnormal Returns). The top 10 also includes some more-familiar names, such as Netflix
, Domino’s Pizza
and Avis Budget
In Washington news, Republican lawmakers on the House Intelligence Committee have drafted a report on the panel’s yearlong probe into Russian election interference. It says they found no evidence of collusion between Moscow and Trump’s campaign.
A reading on small-business confidence early showed another surge, and an inflation figure is due ahead of the open — here’s what to watch in the CPI report.
Check out: MarketWatch’s Economic Calendar
Clothing service Stitch Fix looks set for a down day after an earnings miss, as it gets ready to put 38 million more new shares on the market — months earlier than typical after an IPO.
Dick’s Sporting Goods
is among the companies due to post earnings before the opening bell.
The pilot in the fatal New York helicopter crash says an accident with one of the passengers’ bags may be to blame.
In U.K. political news, Russia’s Vladimir Putin has until 8 p.m. Eastern Time to provide an explanation for that spy-poisoning case in Salisbury, and the British government’s springtime take on public finances is also getting attention.
Pressure is mounting on Japanese Prime Minister Shinzo Abe over a growing cronyism and cover-up scandal.
“If Rick Saccone somehow loses on Tuesday, regardless of whether the president made the trip on Saturday or not, the media will blame the president,” — David Urban, who oversaw Trump’s 2016 campaign in Pennsylvania, reflects on today’s big election in the Keystone State for a House seat.
Republican Saccone is in a tight race with Democratic hopeful Conor Lamb, and Trump visited Pennsylvania on Saturday in an effort to fire up GOP voters. Analysts say the vote could indicate how this year’s midterm elections will play out.
Americans will bet $10 billion on March Madness — just 3% of it legally.
Jack Dorsey’s verifications-for-all plan looks bad for Twitter
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