Making money: what the experts think
Brexit, what Brexit?
“At what point do financial markets start to panic about the risk of a no-deal Brexit,” asked Nils Pratley in The Guardian. “In theory, you’d think it would be about now”, given wholesale political confusion and a rapidly ticking clock. But all we’ve really seen is a “minor wobble” in the pound. Some City strategists seem determined “to pluck some cheerful titbits” from the dismal tide of political news. And the market as a whole “continues to ascribe a low probability to a no-deal Brexit” – most strategists at big banks put the odds at less than 20%. “This relaxed tone may yet turn out to be justified by events”: eleventh-hour brinkmanship “is always a possible plot line” in EU negotiations. “Yet the air of complacency in markets is extraordinary.” Even a “one-fifth chance” of a cliff-edge Brexit “should be alarming at this late stage”.
Chip dip
The big tech companies aren’t the only ones reporting lacklustre results due to weak Chinese consumer demand, said David Streitfeld and Don Clark in The New York Times. The situation is also playing havoc with chipmakers. Nvidia has warned of a 20% revenue fall; Intel is also failing to meet forecasts. The ubiquity of chips, as “the brains” of every kind of computing device, “means they provide early signals about changes in supply and demand”. And the signs are looking ominous. “With chip manufacturers predicting slumping sales for 2019, tech more generally could be in line for a slowdown.”
Fade to grey
The notion that a “chip dip” could lead to a general downturn evokes memories of the 2000 dot-com bust, “when one day tech had an unlimited future and the next it was crashing”. Fortunately, perhaps, “the industry no longer carries the stock market”. Having dictated wider performance for years, the influence of the big six tech companies – Alphabet, Amazon, Apple, Facebook, Microsoft and Netflix – is waning. When the S&P 500 “pushed to a record high last summer”, rises in their share prices “accounted for half of its gain”. But in the recent January rally, their stocks accounted for only 17% of the rise. Perhaps less a case of Tech Bust 2.0 than of fade to grey.