May 28, 2019

Trade War and Huawei ban

President Trump has signed an executive order that prohibits U.S. companies from buying telecom equipment from foreign companies at their discretion. And the U.S. Commerce Department has now added Chinese company Huawei and 70 affiliates to its "Entity List” - a move that bans the telecom giant from buying parts and components from U.S. companies without U.S. government approval. Doug Kass on twitter says this is a worrisome development.

The Huawei Situation Deteriorates and holds new risks that investors are not focusing on! The key pressure points are not well understood nor  discussed:

1.  The Yuan is near the end of the permissible band.  The Chinese probably do not want to devalue as it
will cause domestic inflation (and unrest) and worsen results with the U.S. on merchandise trade.  

2.  This may set at risk the HK/Dollar peg. This is the BIG one.