TikTok, WeChat Over in the U.S.?
Friday, September 18, 2020
It’s been a big week for economic data, and the stock market hasn’t been too brutalized by the results. Yes, we see some stagnation in the labor market, which seems to be filtering into consumer confidence a bit, but overall, traders have been able to realize their gains in tech stocks by rotating into small-caps and cyclicals, as they would in any normal market circumstance.
We do get a new piece of economic data, which is the Q2 Current Account Deficit. Although not as widely considered as things like GDP or jobs reports, today’s read ought to provide some insight into the country’s “checkbook,” and that is: we’re pretty deep in a hole right now. A headline of -$171 billion was much deeper than the -$112 billion reported in Q1, and the worst deficit we’ve seen since the year prior to the financial collapse which resulted in the Great Recession more than a decade ago.
We did submerge our country’s deficit beneath $200 billion back in late 2005 and mid-2006, which is worse than where we are right now, but this is something to keep an eye on. Obviously, government pay-outs to provide relief to families, small businesses and others has taken precedence in this historic pandemic scenario, but now we finally get a look at what it’s costing us.
TikTok, WeChat Going Dark?
The big news of the morning is the deadline approaching with the U.S.’s hard stance against popular Chinese apps TikTok and WeChat, which President Trump has mandated go unserved domestically starting Sunday. The mandate had originally ordered TikTok to be sold outright to an American company; Microsoft MSFT and Walmart WMT were among the initial suitors, and Oracle’s ORCL bid looked to have been the salve the app needed.
But creating a new company between Oracle and TikTok owner ByteDance, which is based in Beijing, was not what the president had in mind. The clock is now ticking: will an American company step up in the next 48 hours to obtain full ownership of TikTok — which has 100 million users presently — or will new downloads of the app be removed from the Apple AAPL app store and Google GOOGL Play?
Remember, Trump doesn’t just want U.S. ownership, but a stipend paid to the Treasury Department for having “brokered” the deal. Far from being something the federal government is normally involved with (in the first world, anyway), this looks to be an enormous number of hurdles to scale in such a short amount of time. No doubt negotiations will continue, but up until Sunday, expect downloads of TikTok in America to skyrocket.
Questions or comments about this article and/or its author? Click here>>
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
Click to get this free report
Microsoft Corporation (MSFT): Free Stock Analysis Report
Apple Inc. (AAPL): Free Stock Analysis Report
Walmart Inc. (WMT): Free Stock Analysis Report
Oracle Corporation (ORCL): Free Stock Analysis Report
Alphabet Inc. (GOOGL): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
Latest Markets Videos
- Tesla removed from S&P 500 ESG index on autopilot, discrimination concerns
- US STOCKS-Wall Street ends sharply lower as Target and growth stocks sink
- Fed could cut rates in 2023, 2024 once inflation under control -Bullard
- Powell says Fed to 'keep pushing' rates higher until clear inflation is falling