A Look at Google’s Suppliers

Looking at rumors isn’t always the most worthwhile activity when it comes to the stock market, but when a rumor gains a foothold in the public’s eye, it needs to be examined, even if it isn’t necessarily true. A rumor can sway markets just because of the strong psychological impact it can have on people, and this alone can make a pervasive rumor move prices, regardless of the facts behind it.

One of the rumors currently circulating is that the Google division of Alphabet is planning on dropping Intel’s server chips, and begin using Qualcomm. Intel is a common name in much of the world, and they have done a huge amount of business with both individual consumers and big businesses, but according to sales reports, the number of personal computers being bought each year is currently on the decline thank to the rise of smartphones and tablets. This has hurt Intel a bit, who has seen their stock drop from a one-year high of over $35.50 to their current price of $28.64. (more…)

Fed Impact Already Here

For months, traders have been worrying about what will happen if and when the Federal Reserve raises interest rates. This psychological factor has already manifested into trading habits, so in effect, the impact of a rate hike has already been partially felt. Traders and investors alike have been far more cautious than usual, driving down prices intermittently. This was exactly the impact that a rate hike was expected to have, and as such, when the rate hike is announced, the damage should–theoretically–not be nearly as bad as it was originally expected to be.

The Fed is expected to raise interest rates sometime next week. This is not a definite occurrence yet, only a highly probable event. The good news is that much of the damage that will be done to short term asset prices has already been done. (more…)