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In sum: all the conditions discussed through the week are ongoing; including the 'red flag' warnings to at least be cautious. Semiconductor shakeouts have exemplified the type of 'trap-door' selling that can radiate to various stocks in a certain situaiton. Then there are stocks like Intel which is benign relative to the online / tracking issues.
More so than Texas Instruments (TXN), also down a bit, semi opportunities will be created to enter these again for those desiring; but I think there's no urgency at the moment In the case of Intel it's the duration of a turnaround which will be very promising eventually; but it takes time.
Stocks like our home-run AMD are more stable (but extended; and that's why ringing the register for that 20% second portion of sales if you bought all the way down at 17 makes sense; or bet on it holding into the new tax year..and not at higher cap-gains rates). AMD or any involved with sub-contracted work done in Taiwan have a degree of risk that can't entirely be dismissed related to whether or not China will restrain themselves. Apple is not immune to risk related to China, but has nurtured a good relationship so far. Tesla too.
The solution to all of this would be an actual cure, more protective vaccine, or antiviral drug to deflect the pandemic, which rages on in much of the world or is barely controlled in others. There is another issue of growing concern; it's a 'ransomware' threat by hackers to 'unite' against the U.S. Are they listening to Russia's Putin? To use one of his favorite words; the world seeking perfection in this environment has 'phantasmagoria' (dreamlike fantasies?).
While we should recognize the potential 'buzz-kill' that China portends; there's a belief that they have to be sensible; although there's no assurance of that. It is noted that they have nurtured financing or operation arrangements for over a dozen countries (sometimes railroads or ports; Kenya is not the only one); a few of them have had recriminations as they reflect now on China's behavior.
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I noticed that President Biden casually dismissed the Taiwan issue; by saying to Anderson Cooper (a CNN Town Hall) that we essentially would defend the Island. There's not a formal commitment (it's a gray blur); but probably that's the correct stance for him to take; even though some believe it's untenable to actually believe we could prevent a Chinese takeover if they really swarm it. It would however wreck China's image throughout Asia; and the fear is that they have enough problems developing that they might take a 'now or never' view; although we don't have evidence of that dominating policy, other than military moves and exercises. They just sailed into Japanese waters with Russia too; and I doubt that anybody's planning on attacking Japan (the disputed islands).
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I expect some of the giants like Google to break to the downside; after some defense perhaps. It's a good example of a stock with a lengthy advance that's not had a correction of signficance. No assurance of one; but it makes sense for it to be rolling-over (I've noted sequential lower highs) and has influence in many ways on other stocks. Business is growing; just noting high valuation.
In most of these 'mega-caps' I've previously discussed some heaviness that's related to booking capital gains in this tax year to avoid perceived increases in 2022. However, those likely would not be retroactive; and may not occur at all so it's tough to weigh any decision on a huge stock one's held for years based on tax considerations; and typically one doesn't. Their revenue growth used to sustain earnings is the typical analysis; but doesn't factor lost revenue due to the entire ad-tracking aspect (gee, no wonder Android phones don't offer the same denial ability that Apple IOS does.. unless the App developer choses).
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Relative to the big-techs; Apple has held up better; but it's underperformed a bit lately; which given a 'potential' head-and-shoulders top (just short-term); it may have some vulnerability nearby. Now I know that some believe 5G will be able to bolster their sales; but I don't think that's quite as massive as people think; though it will be a prolonged upgrade cycle; hence the iPhone 14 next year will be 'even more' tremendous' (assuming no China crisis). What really is rarely noticed is that AT&T has enhanced all their towers basically; so the customers that don't have 5G 'or' do but not super-fast, will find it's very fast.
In other words customers aren't missing the lack of saturated mid-wave band service. And new Qualcomm 860 modems provide better range. But before I delve into the tech aspects; I'm just saying fine longer-term; dubious for now. I am more concerned about the reactions near-term than the very long-term.
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We'll see how the new week begins; but for now the 'storm warning' flags are still hoisted; but the degree of storm is hard to determine; aside what you see are companies that miss earnings (or revenues in the case of tech) tanking in swift fashion, which is sort of forewarning about limited support for stocks that disappoint. And you have a few with incredible moves higher; but that's also a market performance not particularly balanced. Continued caution prevails.
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Tech stocks hit a wall; supply constraints are only a part of it; and some will do very well next year; but primarily later. Will mega stocks defy laws of gravity in the near-term? I think they already are feeling the effects of negative press as well as concern about revenue business models for some more than others
Those headwinds won't be cleared-up by earnings; however the overhang of 30% of S&P stocks reporting earnings over the coming week may impact the changing dynamic of this market, which reflects the 'walled-gardens' unfolding among many of the tech stocks (sort of forced to follow Apple's guideline as surveys show that consumers are indeed preferring to be able to opt-out of a constant stream of tracking.. but again there's a cost as firms have to make a degree of revenue somehow. And here you differentiate the capital flows and have a way to contest whether Facebook isn't going to have huge inflows as in the past, though I certainly concur about their 'social' dominance.
So the warning flares were fired in recent days; and we're sort of 'on-guard'.
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Very interesting today.