5.10 - focus back on China - US rivalry
New developments in trade war are here.
Yesterday we talked about oil. And it is safe to assume that with the growth of prices for the black gold a lot of people and traders turned their attention towards the black commodity, forgetting about other turbulences in trading world. But, sadly these shakes did not go anywhere and all of them are still very much there, waiting to undermine whatever stability the markets might have found.
For example, the stand-off between China and the United States is still there with no signs of relief upon the matter. Trump and his administration keep on insulting their Chinese counterpart with American President Mike Pence stating that China are trying to take a hit and manipulate American democracy. And we all know that ‘democracy’ in America is viewed as something that is worth going into real war for.
Moreover, United States have declared about their intentions to form a special coalition against China. The US strive to join together with other countries in order to stand against unfair, as the US claim trade deals and policies of the United States. And although we are led to believe that the two leaders of China and United States are ready to meet once again and talk the question over, the practice shows that such assumptions never lead to anything productive.
What dies all of this can tell us traders? well, the first thing that we can get out of all of this is that we are extremely far away from some kind of developing of the situation. Even if the leaders of the countries meet, Trump is known for his disliking China too much. It doesn’t seem to us that he would go as far as to make a deal with the Chinese, no matter the conditions they offer for the United States. He is dealing with them like with business rivals – trying to drown them.
Plus, Trump went too far in order to display China that the United States are better off without their partnership by signing a lot of trade agreements with the counters in the region. South Korea and Japan all got theirs, while China is struggling to find new investors.
Second we can see that Chinese economy is just as far away from recovery as the successful negotiations. As sad we are to admit it, but Trumps policies work just fine. Investors do turn away from Chinese economy and every successful report form American side turn into the selloff of Chinese stocks and indices, even this week hasn’t been that kind to Chinese numbers. Selloff are quite regular and good luck finding new investors when there is no relief in the economy. Of course, Chinese try and attract new investors with their building investment opportunities, but the perspective doesn’t seem that attractive at the moment.
All and all we are to witness even more turbulence in the nearest future. and it seems relevant to say once again – it is time to switch to other assets. Euro, gold and oil are much less worrisome and have been acting like safe havens for traders for a long time.
Apple has been getting a lot of attention from both traders and users. With three new models of iPhone being issued in September everything we could think and talk about was whether these phones were going to be an iPhone X-like failure or a full success. But we have forgotten all about other tech-moguls that can surpass Apple in shares success as well as appealing to audience.
Microsoft. Earlier this week a presentation for the new production line o the company took place. The design of the technologies as well as characteristics of the new models took everyone by surprise as for the first time in years markets started talking about Microsoft surpassing Apple when it comes to users’ attention in the nearest future and possibly in the long run. of course, that doesn’t mean that Apple is under threat of demise, but we said it before – in case Apple are going to go on with expensive technologies, eventually the company is going to lose a bif chunk of clients as well as trust of the investors.
In the present economic situation, a lot of people are going to go further from Apple’s services because of the price. Of course, those living in countries like Canada and the United States are not going to be averted by the prices, but what about those countries where the economy is not nearly as strong as theirs. Countries, where dollar is expensive are not going to hold onto Apple products just for the brand. And at this point that is what it is – a battle of brands.
And Microsoft has been in the scene long enough in order to have aces up its sleeve. Of course a full-blown rivalry out in the open is going to chase investors away from all the drama. We have enough nerve-wrecking experiences and possibilities as it is two big companies going into economic war is not something that is going to attract a lot of investors. Plus, we are better drawn towards healthy competition without knowing all the drama.
So, does Microsoft have the chance to surpass Apple? It is not fully impossible, we would say, it should just take a lot of time and a lot of mistakes from Apple’s side and a lot of steps in the right direction from Microsoft. That could take years. Apple’s products stopped selling because the novelty wore off. They basically issue the same phone over and over again, and people are getting tired of this. In case Microsoft has something better to offer in the nearest future that might be just the thing for Microsoft.
Is you ask us – we think that it is high time for a change in the picture anyway.
- by Anna K.