Qualcomm Tumbles on Anti Trust Violations

Qualcomm Tumbles on Anti Trust Violations

22 May 2019

Riskier assets are mixed on Wednesday as China/US tensions continue to percolate. The semi-conductor market will likely face headwinds as a US judge ruled that Qualcomm violated anti-trust laws in its suit versus Apple. The UK reported soft inflation while Japanese exports contracted with most of the decline coming from lack of demand from China. This is clear evidence that the US-Chinese tariffs are eroding economic activity around the globe. The API reported a surprise build in crude oil inventories which is weighing on prices.

Tension Between the US and China are Rising

US-China tensions are still climbing as reports suggest the US may add several more Chinese companies which would cut off their access to US technology.  Tensions are already high and China sees the punishment of Huawei as an escalation.  President Xi is settling in for the long haul, while President Trump is readying a new round of aid for US farmers.

UK reported softer than expected April inflation figures.  Headline CPI came in at 2.1% compared to expectations that it would rise by 2.2% year over year. This was up from 1.9% in March. CPIH compare in at 2% year over year versus expectations of 2.1% and this was versus 1.8% in March. Japan exports contracted for the fifth consecutive month.  Exports decline by 2.4% year over year compared to expectations of a decline of 1.6%.  Imports rose a stronger than expected 6.4% year over year.

Crude Oil Inventories Unexpectedly Rose

After the closing bell on Tuesday the American Petroleum Institute reported another surprise build in crude oil inventories. Crude oil inventories increased by 2.4 million compared to expectations that it would fall by 2.5-million-barrels. The API this week reported a small build in gasoline inventories for week ending May 17 in the amount of 350,000 barrels. Expectations were for a draw in gasoline inventories of 1.5-million barrels for the week. Distillate inventories fell by 240,000 barrels for the week, while inventories at Cushing rose by 870,000 barrels.

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