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Illustration: Sarah Grillo/Axios
U.S. companies with significant exposure to China have seen their stocks tumble since President Trump's opening salvo in the trade war. But it wasn't really China or the oft-invoked trade tensions that hurt those companies, Axios' Courtenay Brown writes.
The big picture: Chipmakers like Skyworks, Qorvo, Qualcomm and Micron, along with Wynn Resorts, top the list of S&P 500 companies that make their biggest share of revenue in China, data compiled by Goldman Sachs shows. All of those stocks are deeply in the red since Trump took the first steps toward a full-blown trade war on Jan. 22.
More consumer-focused companies like Nike (which nets 12% of of its revenue from Greater China) saw their stock prices increase, in line with the consumer discretionary sector which outperformed the broader market.
Rather than a broad-based China slowdown, data shows individual companies saw largely individual results.
What they're saying: Count executives at Texas Instruments — which gets 44% of its revenue from Greater China — among those who say the trade war isn't to blame for their struggles.
The 20 S&P 500 companies with the greatest share of revenue coming from China had a rough year in 2018.
However, their stock movements during the year showed that more exposure to China didn't equate to bigger losses, and reduced exposure didn't necessarily help.
A Venezuelan protester with "Freedom" painted on her face. Photo: Jesus Merida/SOPA Images/LightRocket via Getty Images
Investors hoping for the removal of Venezuelan President Nicolas Maduro may get more good news this week. The Trump administration signaled it may impose new sanctions against the country's oil sector — the lifeblood of Venezuela's economy and only major source of revenue.
The news followed the announcement Wednesday the U.S. would recognize Juan Guaido, head of Venezuela's National Assembly, as the country's president, not Maduro.
The big picture: The country’s sovereign bond maturing in 2027 rose on Wednesday to its highest level since June. That’s notable considering the 2027 bond, and all but one of Venezuela’s other bonds, have been in default since November 2017.
What's next? The oil sanctions may be the final nail in the coffin of a leader who has presided over an economy expected to hit 10,000,000% inflation this year with a 90% poverty rate.
My thought bubble: Maduro's ouster could be an inflection point in the country's history, but it will take a lot of work to turn what's effectively become a failing narco/petro-state into a functioning economy.
From the World Economic Forum, the Washington Post's Heather Long reports there are serious grumblings among business leaders that China has taken the lead on artificial intelligence.
Why it matters: "The Chinese government has made tech dominance a priority in its 'Made in China 2025' plan. Chinese leaders are pouring government money into AI research and development in a scientific push that has been compared to the space race or the Manhattan Project that the U.S. government funded during World War II to develop a nuclear weapon."
The bigger picture: "There are concerns that the United States is falling behind, and executives might not even realize it."
Photo: Alan Santos/PR via Flickr
Strikingly, Brazilian President Jair Bolsonaro has been this year's foremost addition to the World Economic Forum's loftiest circles, Axios' Felix Salmon writes.
Why it matters: Davos is a small town, where plutocrats and heads of state eddy around each other, each with their own gravitational attraction. Look to the very center of attention and fascination, and you will very frequently find a strongman president.
The bottom line: The WEF might be a high-minded nonprofit, but it runs on money and power, both of which are fundamentally amoral. After the Davos globalists embraced Trump in 2018, it comes as no surprise to see them doing the same with Bolsonaro.
Screenshots of the Instagram profiles of Nicolas Maduro and Jaun Guaido
Social media was abuzz with rumors Wednesday that Maduro had been not only usurped of the presidency, but also stripped of his verified influencer status on Instagram.
But, but, but: Business Insider news editor Rob Price says an Instagram spokesman told him Maduro was never verified on the platform.
Editor's note: A friendly reader pointed out that Wednesday's newsletter incorrectly referenced the source of data on foreign buyers of U.S. Treasury notes. That data comes from the Treasury Department, not the CFTC.
Days without a factual error: 0