With three of the next four weeks interrupted by bank holidays in the UK, British companies seem to have been rushing to get their March trading updates and financial results published. We’ve had a surprisingly busy few days of announcements from companies of all sizes. But it’s been nice to have something to talk about other than the relentless tariffs chatter from the US.
That’s likely to pick up again next week as the US tech companies start to announce their Q1 financial results.
We saw the first cold hard figures from the fallout this week when NVIDIA (NSQ:NVDA) announced that controls on the estimated $10bn of sales booked in China would add $5.5bn of costs. The company’s H20 processing chips have been in high demand from Chinese tech giants including Alibaba and Tencent and it had previously been suggested that tariffs and new policies wouldn’t impact these sorts of products. Nvidia executives are said to have been “blind-sided” by Donald Trump’s decision to clamp down on the export of H20s, which are now expected to be significantly more expensive to export. There are also fears that the company’s failure to deliver goods as originally planned could incur penalties.
Intel (NSQ:INTC), which is due to announce results on Thursday, has also told its Chinese customers that it will now require a license for exporting to China. And the tariff impacts go both ways. Intel is supplying customers in China and importing components manufactured in Chinese factories. In October the company announced a $300m expansion of its Chinese facilities.
And it isn’t just US and China-based companies which are feeling the pain of the fallout. Financial results from Dutch chipmaker ASML Holding NV (AMS:ASML), which were announced this week, showed that orders had fallen below expectations because of increased uncertainty brought on by the trade war.
For private investors it is important to try to look beyond the noise (and there is a lot of that at the moment). The big question is whether or not there is anything in the announcements which should impact decision making. Next week will be a good opportunity to take stock of the investment cases for some of these big companies with the most up to date numbers and outlook statements to hand.
Economic Calendar
Wednesday… |
