1. India has banned dozens of Chinese apps, including TikTok, after a border clash. How will US Big Tech fit in?
This move comes after recent tensions arising from border disputes that left 20 Indian soldiers dead. It represents the latest development in the tit-for-tat retaliation between India and China. Could this present an opportunity for American software companies to capitalize on Indian markets with less competition? India is the second most populous country in the world, but of its 1.3 billion citizens, only about 50% are online. As that proportion grows, US tech companies like Facebook and Twitter desperately want to tap into this market. The recent ban might bring those aspirations closer.
2. The Boeing 737 MAX recertification commencement is boosting travel stock optimism. It’s still early days, in our view.
The 737 MAX, Boeing’s best-selling aircraft, has been grounded worldwide since March 2019 after two fatal crashes. But yesterday, the FAA began recertification flights, a key milestone in getting the planes back in service. Boeing shares jumped +14%, with airlines like Southwest and travel co’s like Booking Holdings rallying in sympathy. It’s an incremental positive for the travel industry, but the COVID-19 pandemic is still expected to mean lower-than-usual travel demand for years.
3. Most pro investors think the next 20% market move will be down. It’s been the most hated market rally in recent memory.
Citigroup’s quarterly survey found that ~70% of asset managers believe that a 20% correction is more likely than a 20% uptick in the stock market. Despite the recent market rebound, cash holdings have remained twice the level of last year and fewer fund managers want to commit new cash to the market today than in March. The views of “pros” should not be taken as fact, but wariness among experienced investors is important to keep in mind and should be weighed against retail investor expectations about unbridled growth.