In recent years, there has been great optimism about the seemingly unlimited potential of the tech industry to sell more products and advertisements to consumers. Now there are warning signs everywhere.
Earlier this month, Apple unofficially launched the tech earnings season with the critical warning that its revenue target for the final quarter of 2018 would be missed due to weak iPhone sales, mainly due to a slowdown in China.
The announcement shook Apple's stock and the wider market, raising concerns that even corporate giants might be burdened by the broader challenges of the global economy. This includes the trade war between the United States and China.
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added to these concerns last Thursday when they reported disappointing results. In a teleconference with analysts, Intel's interim CEO Bob Swan noted that "trade and macro concerns, especially in China, have intensified." Regardless, Intel has updated its list of risk factors to include the possibility of a "recession or slowdown in growth".
"We still believe that tariff talks in China and tensions remain a black cloud over the tech space Intel's comment:" Daniel Ives, a Wedbush analyst, wrote in an investor Friday Grade.
The problems of the tech sector do not stop there.
The Federal Trade Commission is reportedly considering a "punishment" against Facebook for months of privacy scandals. Advocacy groups have also urged the FTC to break up Facebook.
With the Democrats firmly in control of the House of Representatives, there could be an increase in hearings and attempts to regulate tech companies like Facebook this year. In contrast, Amazon has stopped investors in October by predicting the holiday with weaker sales forecast quarter than investors expect. Since then, the conversation has become a new unknown to the business: how could the divorce of Jeff Bezos, the founder and CEO, influence his involvement in and control of the company?
And then there's Microsoft, which regained its title as the world's most valuable company in the last quarter of 2018, partly by avoiding the recent regulatory and hardware selling issues of its peers.
Now the question arises as to whether Microsoft can stay at the top. For the recent success of Microsoft, the big bet on the lucrative cloud computing market is of key importance. Azure, Microsoft's cloud business, saw slow growth over the three months to October, but Ives says Microsoft still appears to be "outperforming the Amazon market leader."
2. Missing economic reports: Even if the government re-opens, the economic reports pending this week could be delayed. Fourth quarter GDP is scheduled for Wednesday and a personal income and expenditure report will be released on Thursday. However, employees returning to work may need to stop collecting and analyzing the data before publishing the reports.
3. The Job Report: Investors still receive the January job report scheduled for Friday. It is published by the Department of Labor, which continues to be funded. The agency has stated that arrested government employees as well as those who work without pay are counted as employed as they receive a repayment as soon as the government is reopened. Economists expect 168,000 new jobs, 3.9% unemployment and 3.2% wage growth.
4. How "patient" is the Fed: The Federal Reserve statement and Jerome Powell's press conference on Wednesday are likely to signal that the central bank is on hold for the time being due to slowing growth. Financial markets broke out late last year, in part for fear that the Fed would raise interest rates too fast.
Two important questions remain: Will the Fed statement explicitly indicate that officials are "patient" in the face of future rate hikes? According to HSBC, such a wording would not allow a rate increase, at least for the next two meetings. And will the statement be that the Fed is ready to improve or even halt the reduction in the balance sheet? Some investors believe the Fed's shrinking balance sheet contributes to market turmoil.
5. GE's Great Expectations: After two terrible past two years GE  ( GE ) the stock sums in 2019 are staggering 21% higher GE has finally turned a corner under new CEO Larry Culp.
But it will be difficult to meet the hype when GE reports results from Thursday. GE Power continues to bleed. Land mines continue to linger at GE Capital. And that's up with lengthy investigations by the SEC and the Justice Department.
6th Coming Week:
Monday – Caterpillar ( CAT ) Merit
Tuesday – Consumer trust report; Case Schiller house price index; Apple, Verizon ( VZ ) and Harley-Davidson (19459007) HOG Revenue
Wednesday – Interest rate decision of the Fed; AT & T (19459007) T ) McDonald's ( MCD . Boeing ] BA ) Microsoft, Facebook and Tesla [ TSLA ) Report Revenue
Thursday – Amazon, GE and UPS ( UPS Revenue Report
Friday – Work report, ISM manufacturing index, consumer sentiment report; Exxon ( XOM ) and Chevron ( CVX ) Reportror