Tech Stock Focus: Semiconductor Chart Shows Downside
Tech Stock Focus: SMH ETF Support Level $96
The chart above shows that key action over the last year formed a line of support around $96.
The current downtrend of the SMH ETF looks like the index is headed down to support. Unless we get a settlement of this trade dispute we could still have further downside.
Atlanta Fed GDPNow Estimates Slow
The Atlanta Fed predictions for Q2 had been 4.7%. The just-released expectation is now 3.8%. The drop could be tied to trade war fears. Businesses could start to reassess their plans for the year.
Auto Key Driver For Tech
GM, in fact just said tariffs could "lead to a smaller GM." Hyundai said something similar.
The longer this now-global trade dispute doesn't get settled, more companies like GM could pull back.
The auto industry has been a key driver for semiconductor companies as tech content per vehicle has been increasing.
Semiconductor companies also have some of the highest exposures to China of our tech stock coverage. A drawn out fight can hit the SMH ETF.
In speaking to the companies we'd guess nobody's seeing a slowdown yet. But as business leaders read the news daily someone might blink which could start a domino of slower orders.
Until this trade war sees some resolution we're concerned that the semiconductor ETF SMH might not see support until $96.
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