US China trade war escalates: Google suspends Huawei android service

As US China trade war escalates, Google suspends Huawei from gaining access to Android updates, a move that will send shockwaves through the industry.

21 May 2019, Swissquote – As US-China trade war escalates, Google is halting some its services for smartphones made by Huawei Technologies Co., according to people familiar with the matter, in a sign that the U.S. decision to deny the Chinese tech giant access to U.S. technology will bite into its booming consumer-device business.

Huawei smartphone users could lose some Google services

US China trade war, Google suspends Huawei

Huawei, which recently surpassed Apple Inc. as the world's No. 2 supplier of smartphones--it now trails only Samsung Electronics Co.--relies on Google's Android operating system to run its devices. Though existing phones are expected to keep functioning largely, as usual, users could lose some functions, according to a person familiar with the matter. Separately, San Diego-based Qualcomm Inc. has suspended shipments to Huawei of its chips, and its employees have been told not to communicate with the Huawei side, according to a separate person familiar with the matter.

Qualcomm chipsets are used in certain Huawei smartphone models. Huawei also designs a large number of its own chips for higher-end phones. Last week the U.S. Commerce Department announced it was adding Huawei to its "Entity List" on national-security grounds, requiring companies that export U.S. technology to the Chinese company to apply for a license. Huawei, the world's biggest maker of telecommunications gear, draws upon suppliers from around the world, but it relies on American companies to supply certain components that go into its smartphones, cellular base stations and other products.
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Swiss stocks market slid 0.8 percent

The SMI slid 0.8 percent to 9,582 points Monday, with the US-China trade war, growing tensions between the US and Iran, a government crisis in Austria and next Sunday’s European elections all downside factors. A strong “safe haven” Swiss franc put more pressure on export-oriented Swiss companies. Lafargeholcim slid 4.6 percent or CHF 2.48, largely because of a CHF 2.00 dividend payment.

Among second-tier stocks, Julius Baer slid 4.7 percent after an analyst downgrade to "neutral" from "buy" that lowered the target to CHF 45 from CHF 46.10. Apple supplier AMS slumped 13.4 percent, as observers suspect China could retaliate against US sanctions on Chinese company Huawei with sanctions on Apple. But profit-taking could also be a factor, as AMS has gained more than 80 percent this year. Telecoms stocks were sought Europe-wide as defensive papers. Swisscom rose 0.9 percent. Heavyweights Nestle and Roche fared better than the market, falling 0.5 percent and 0.1 percent respectively.

European stocks market outlook

The Stoxx Europe 600 slid 1.1%, as most regional indexes notched declines. Italy's FTSE MIB plunged 2.7% amid increased political tensions, after Deputy Prime Minister Matteo Salvini led a rally Saturday ahead of European elections, vowing to take on the region's mainstream leaders. In Germany, the DAX declined 1.6% to 12,013.75, adding to its woes Friday when it swooned 0.6%. Ryanair's gloomy outlook for the coming year dragged on London markets Monday and fellow airlines, while banks were also weaker.

A fresh bout of trade tensions also weighed on London and European equities. The U.K.'s FTSE 100 dropped 0.9% to 7,285.65. On Friday it had edged down 0.1%. The pound reversed course and gained 0.1% to $1.2736 after falling 0.4% Friday. U.K. travel company Thomas Cook is in talks with its Nordic card supplier as it seeks to reassure partners over its cash position, Sky News reports, citing a company spokesperson. Thomas Cook fell another 12.7 percent.

US-China trade war impacts U.S stocks market

U.S. stocks retreated intraday, though off session lows, as souring U.S.-China trade relations continued to weigh on market sentiment with technology shares taking the brunt of the selling pressure. The Dow Jones Industrial Average fell 116 points, or 0.5%, to 25,647, the S&P 500 index declined 21 points, or 0.8%, to 2,837, while the Nasdaq Composite Index retreated dropped 114 points, or 1.5%, to 7,701.

Technology, real estate, and materials sectors were the S&P 500's biggest decliners. At session lows, the Dow was down 203 points, or 0.8%, the S&P 500 fell 27 points or 1%, and the Nasdaq had fallen 137 points or 1.8%. Sino-U.S. trade tensions continued to escalate, with shares of chip makers taking it on the chin as U.S. technology companies have begun to comply with the White House's ban on China's Huawei Technologies Inc.

Chances of further trade talks between the U.S. and China appeared to take a hit over the weekend after CNBC reported that scheduling for the next round of negotiations is "in flux," because neither side appears willing to agree to concessions. The South China Morning Post also cited several China-based analysts who argued that China has little incentive to engage in further talks until U.S. negotiators show a willingness to compromise.

Asian stocks market

Asia Pacific stocks are roughly split between rising and falling markets but indexes across the board are within 0.5% of their most-recent closing levels. Chinese equities have eased some from their initial bounce, but they continue to post among Asia's biggest gains.

US government Bonds outlook

U.S. government bond prices were little changed, with yields hovering near the bottom of their 52-week range, as uncertainty about the global political and economic environment continued to support demand for safer assets. The yield on the benchmark 10-year U.S. Treasury note settled at 2.416%, compared with 2.396% Friday.


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