In the past years, optimism was high for the industry's seemingly limitless potential to sell more products and advertisements to consumers. Now the warning signs are everywhere.
Apple unofficially kicked off the technical gain season earlier this month with a clear warning that it will miss its revenue target for the final quarter of 2018 due to weak iPhone sales, most likely due to a slowdown in China.
The announcement shook Apple's shares and the common market, resurrecting fears that even corporate giants could be weighed against wider challenges in the global economy. This includes the trade war between the US and China. Intel added to these concerns last Thursday when reporting disappointing results. During a conference call with analysts, Intel's Chief Executive Officer Bob Swan noted that "trade and macroeconomic issues, especially in China, have intensified." Separately, Intel updates its list of risk factors to include the possibility of a "recession or slowdown in growth". "We continue to believe that negotiations on China's tariff and tension remain black clouds over technology space, as shown by Intel's comments," Daniel Ives, a Wedbush analyst, writes in an investment note Friday.
Problems in the technology sector do not stop there. It is reported that the Federal Trade Commission is considering a "record" fine against Facebook after months of privacy scandals. Advocacy groups also urge FTC to break Facebook.
With Democrats now firmly in charge of the House of Representatives, this year there may be an increase in hearings and attempts to regulate technology companies like Facebook.
Meanwhile, Amazon frightened investors in October, predicting weaker holiday sales a quarter of investors' expectations. Since then, the conversation has become a new unknown to the company: how the divorce of the founder and Chief Executive Officer Jeff Bezos could have influenced his share and control over him.
And then there is Microsoft, which regained its title as the most valuable company in the world in the last quarter of 201
8, partly because of the recent regulatory and hardware sales problems of its colleagues in the industry.
The question now is whether Microsoft can stay on top. A central place in Microsoft's success at the end of last year is its big bet on the lucrative cloud computing market. Azure, Microsoft's cloud business, has seen slow growth in the three months ending in October, but Ivs claims Microsoft still seems to "gain a share" against Amazon's market leader
2. Missing Economic Reports: Although the government is resuming its work, the economic reports that need to be reported this week can still be delayed. GDP for the fourth quarter is scheduled for Wednesday and a report on personal income and expenditure will be released on Thursday. But employees returning to work may have to complete the data collection and analysis before publishing the reports.
3. Employment Report: Investors will still receive the job report in January, which is scheduled for Friday. It is published by the Ministry of Labor, which remains funded. The agency said that calmed civil servants as well as those who work unpaid will be considered as employed because they will receive a payback once the government reopens. Economists expect 168,000 new jobs, 3.9% unemployment and 3.2% wage growth. 4. How Many "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 currently holding back due to a slowdown in growth. Financial markets exploded at the end of last year, partly because of fears that the Federal Reserve raises interest rates too fast
There remain two main questions: whether the Fed's statement will explicitly state that officials will be "patient" about future interest rises ? Such a wording would not increase the speed of the telegraph at least for the next two meetings, according to HSBC. And will the statement say the Federal Reserve is ready to correct or even stop the balance? Some investors believe the Fed's contraction is contributing to market turmoil.
But overcrowding will be hard to live up to when GE reports on Thursday. GE Power continues to bleed money. Mines continue to hide in GE Capital. And this is at the peak of ongoing investigations by the SEC and the Ministry of Justice.