Week of Jan 17, 2020 Weekly Recap & The Week Ahead
“When you learn to let go of the need to be right, being wrong gradually lose its power to disturb you.” — unknown
1. Big Tech Dominates the S&P 500 — the recent Big Tech surge is good news for anyone chasing the sector higher, but several strategists highlight it’s a sign investors have lost their risk appetite. The top five publicly traded American companies – Apple (NASDAQ:AAPL), Microsoft (NASDAQ:MSFT), Alphabet (GOOG, GOOGL), Amazon (NASDAQ:AMZN) and Facebook (NASDAQ:FB) – now make up a record 18% share of the S&P 500 Index’s capitalization. That ratio is higher than the tech bubble, according to Morgan Stanley, amid fears the economic cycle will slow.
2. The U.S. and China signed a trade deal, calling a cease-fire in a two-year trade war — Officials said the eight-part agreement will lead to an increase in sales of U.S. goods and services to China, further open Chinese markets to foreign firms—especially in financial services—and provide strong new protections for trade secrets and intellectual property. But it leaves in place U.S. tariffs on about $370 billion in Chinese goods, and possible tariff reductions will be left to later negotiations that will also cover a host of difficult issues. U.S. business leaders generally applauded the pact, but stressed the need to keep negotiations going.
3. Change in Media Access to Market Data — the Trump administration plans to restrict the news media’s ability to prepare advance stories on sensitive U.S. economic data such as inflation and employment, Bloomberg reports. “Lockups” lasting 30 to 60 minutes are currently hosted in Washington for major reports, where journalists receive data in a secure room and transmit them when connections are restored at release time. The change, which could remove computers from the lockup room, would transform how critical market-moving information is distributed to investors and the public.
4. Nestle Spending Big on Recycled Plastic — vowing to make 100% of its packaging recyclable or reusable by 2025, Nestle (OTCPK:NSRGY) is investing as much as 2B Swiss francs to source more recycled plastics to package its products. It will also try to keep the plastic purchasing neutral on earnings through efficiencies. Rival Unilever (NYSE:UN) has further pledged to halve its use of newly made plastic by 2025 as food and beverage makers increasingly come under fire for polluting oceans and landfills.
5. Google parent Alphabet became the fourth U.S. company to achieve a $1 trillion market value — The milestone punctuated a powerful rally in shares of large internet stocks to start 2020. The search-engine giant joins tech peers Apple, Amazon and Microsoft as the only companies to reach the threshold during intraday trading. The biggest tech companies have continued to soar in value, highlighting how investors favor companies that steadily improve sales despite tepid global economic growth.
The week ahead — Economic data from Econoday.com:
