Huawei is banned in the US. The Federal Communications Commission for the first time recognized products of a lot of Chinese companies banned for import and sale because of national security risks. Commission member Carr said that China threatens U.S. interests through espionage.
Telecommunications and surveillance equipment manufactured by Huawei, ZTE, Hytera and several other Chinese companies are banned from importation and sale in the United States because of “unacceptable risks” to national security. This was announced by the Federal Communications Commission (FCC) on its website.
Huawei banned in the U.S. – what is banned?
The products of the subsidiaries and affiliates mentioned in the list of companies fall under the ban. Brendan Carr, a member of the Federal Communications Commission, called the decision unprecedented and unanimously adopted with the support of both parties in Congress. This is the first time in the history of the agency, he noted, that the distribution of communications and electronic equipment has been banned because of national security reasons.
Carr pointed out that “Communist China and other malevolent actors” are too eager to use loopholes in U.S. electronic systems to obtain sensitive information, they are trying to “compromise American interests through espionage, intellectual property theft, blackmail, foreign influence campaigns and other nefarious activities.”
Two years ago, the commission had already banned using government subsidies to buy equipment from Huawei and other Chinese companies, he recalled, and as a result many operators had refused to cooperate with such firms. But that decision left a loophole for buying equipment with private funds, and it’s time to close it, Carr said.
Huawei was put on U.S. sanctions lists more than three years ago, in May 2019. Washington accused the company of industrial espionage, stealing technology and threatening the U.S. economy. In February 2020, The Wall Street Journal, citing statements from U.S. officials, reported that Huawei had covert access to cell phone networks around the world.
The CIA believes Huawei was funded by Chinese intelligence, the Chinese Armed Forces and the Republic’s National Security Central Committee, sources told The Times. At the same time, the FBI believes that Huawei equipment installed on cellular towers near US military bases can jam and intercept Defense Department communications, including those used by the US Strategic Command, which is responsible for nuclear weapons.
Earlier, we reported that Bloomberg named the most profitable stock market in 2022.
Main US stock indices S&P 500 and Nasdaq rose by 1.5-3.3%, Dow Jones fell slightly
Main U.S. stock indices S&P 500 and Nasdaq Composite hit their highest levels in five months yesterday, while Dow Jones Industrial Average ended the trading session at a slight decline.
Other tech companies were also up 7.3%: Alphabet (NASDAQ:GOOGL) Inc. gained 7.3%, Amazon.com Inc (NASDAQ:AMZN) gained 7.4% and Apple Inc (NASDAQ:AAPL) gained 3.7%. Inflation appears to have peaked and interest rates should stabilize, removing major headwinds for tech stocks,” deVere Group Chief Executive Officer Nigel Green suggested.
U.S. stock indices futures – what’s influencing current prices?
On Thursday, traders also assessed the results of the Federal Reserve’s meeting and the latest statistical data.
The Fed on Wednesday expectedly raised interest rates by 25 basis points. Now its range is 4.5-4.75% a year – the maximum since 2007.
The head of the US Central Bank Jerome Powell, said at a press conference following the meeting that inflation in the US continues to remain significantly higher than the Fed’s long-term target, which is 2%. He said he does not expect rates to fall in 2023 if economic indicators are in line with the forecasts.
Also affecting US stock index futures is the fact that the number of Americans filing for unemployment benefits for the first time last week fell by 3,000 to 183,000, the Labor Department said. This is the lowest value since April 2022. The results came as a surprise to analysts, who on average had forecast the number of applications to rise to 195,000, according to Bloomberg. Trading Economics respondents had expected an even larger increase, to 200,000.
U.S. labor productivity rose 3 percent in the fourth quarter and labor costs rose 1.1 percent, preliminary data from the Labor Department showed. Experts on average were predicting a 2.4% increase in the former and a 1.5% increase in the latter, Trading Economics reported. MarketWatch respondents had expected a 2.5% and 1.5% increase, respectively.
The Dow Jones Industrial Average on Thursday decreased 39.02 points (0.11%) to 34053.94. Leading the declines among index components were shares of insurers UnitedHealth Group (NYSE:UNH) and Travelers Cos. down 5.3% and 1.9%, respectively, as well as Boeing Co (NYSE:BA). – (NYSE:BA.) by 2.5% and Merck.
Meanwhile, Standard & Poor’s 500 rose 60.55 points (1.47%) to 4,179.76 points on the day. The Nasdaq Composite Index gained 384.5 points (3.25 per cent) to 12,200.82 points.
Earlier we reported that strategist Morgan Stanley expects the rally in the US stock market to end.
Morgan Stanley strategist expects U.S. stock market rally to end this week
The unexpected rally stock market rally in the U.S. stock market in early 2023 could come to an end as early as this week, after the Federal Reserve raised interest rates for the eighth straight meeting. Michael Wilson, senior U.S. equity market strategist at Morgan Stanley (NYSE:MS), believes.
“We think this dynamic reflects more of a seasonal effect and the closing of short positions after December and last year’s decline in general,” the bank’s analyst team, led by Wilson, said in a report. – In fact, the financials are even worse than expected, especially regarding profitability.”
What is a rally in the stock market?
Since the beginning of January, the S&P 500 is up 4.6% and the Dow Jones Industrial Average is up 1.7%. The Nasdaq Composite index of high-tech companies jumped 8.9%, the fastest pace for January since 2001.
According to Wilson, such dynamics are excessive, and all positive factors are already built into current quotes.
In particular, the Fed will almost certainly raise interest rates by 25 basis points at the end of its first meeting of the year, which ends Wednesday evening. The Fed leadership has not yet given signals about its readiness to stop raising rates, and it contradicts market expectations, the expert noted.
Earlier strategists at Morgan Stanley warned that the beginning of a recession in the U.S. economy could lead to a decline in U.S. stocks by 22% from their current levels by the end of 2023.
Earlier, we reported that the U.S. stock market index will reach new lows in 2023.
U.S. stock market index to hit new lows in 2023
Investors are showing weak confidence in the U.S. stock market index even after a rally this month, with most believing the market has yet to bottom out because of concerns about corporate earnings, Bloomberg reported.
That’s the view of about 70% of the agency’s 383 respondents. At the same time, 35% said that the market will fall to a minimum in the second half of this year. Less than a quarter of respondents believe that the bottom has already been reached.
The survey results indicate that investors remain in deep turmoil after last year’s stock collapse. At the same time, they expect corporate earnings to deteriorate due to an expected slowdown in the global economy.
Almost half of respondents said the key factor for the U.S. stock market today will be quarterly reports from several companies, rather than the Federal Reserve’s decision or a speech by its head, Jerome Powell. The Fed is expected to raise the benchmark rate by just a quarter of a percentage point on Feb. 1, the smallest increase in almost a year.
The Standard & Poor’s 500 stock index is up 6% since the start of 2023. That’s the best reading for January since 2019, as signs of slowing inflation and economic growth spurred expectations that the Fed is nearing the end of its tightening cycle. But the most aggressive rate hikes in decades, combined with rising prices and wages, have created a challenging environment for corporations to ramp up profits.
About 90% of respondents expect inflation to continue to weaken this year but remain above the Fed’s target of 2%. Analysts expect U.S. economic activity to decline in the second and third quarters.
Traders in the bond market expect the economic picture to be so disappointing that the Fed will have to cut rates later this year. At the same time, based on futures quotations, it will be raised to about 5% per annum by the middle of the year.
That contrasts with statements by Fed officials that the central bank would raise rates above 5% rather than lower them this year.
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