Democratic candidates take the stage together for the first time as they jockey for position in the race to take on President Trump in 2020.2020 Electionsread more
In a strategy to draw attention away from Wednesday's Democratic debate, President Donald Trump's reelection campaign bought out YouTube's "masthead," the leading...2020 Electionsread more
Virginia Sen. Mark Warner breaks down the idea behind a bipartisan bill he introduced to provide more transparency in Big Tech.Technologyread more
Tesla is working on new battery cell designs, and a way to make their own cells, with R&D teams in a lab near its car plant in Fremont, California.Technologyread more
These attacks have given the public the opportunity to examine the problems associated with ransomware, where corporations -- not obligated to disclose these attacks -- have...Technologyread more
"As a private company we don't have the tools to make the Russian government stop," Facebook CEO Mark Zuckerberg said at the Aspen Ideas Conference on Wednesday. "We can...Technologyread more
Something unusual is happening in financial markets, and it could mean more gains lie ahead for stocks, if history is any indication.Marketsread more
Underneath the impressive market rally is a trend that doesn't seem quite right, according to J.P. Morgan.Marketsread more
Venezuelan President Nicolas Maduro said security forces had foiled an opposition coup attempt that included plans to assassinate him and other top political figures.World Politicsread more
Credit Suisse initiated coverage of Tesla Wednesday with an "underperform" rating and a price target 15% below where the stock closed.Marketsread more
Wi-Fi 6 will be the next-generation wireless standard. Along with 5G, it will represent the next big shift in connectivity and data, said Irving Tan, senior vice president and...Shaping the futureread more
Swiping a credit card or paying online is one consumer area that may be relatively immune to slowing globalization — or as Morgan Stanley puts it, "slowbalization."
Given their exposure to domestic factors, importance to the banking system and tax collection, and compounding growth effects, Morgan Stanley equity analyst James E. Faucette is looking to names like Visa, Mastercard and PayPal to emerge as "national champions."
As the world becomes increasingly nationalistic, trade wars with multiple countries drag on and global commerce backtracks, Faucette "expects that the payments sector will be an on-going net beneficiary because of the long-term secular shift to electronification and compounding efficiencies," he said in a note to clients last week.
There are some headwinds though. Payments continue to shift online, meaning countries may have more of a national interest to protect them or build their own for activities like tax collections and economic data indicators. while countries may want have control over those networks, Faucette expects a "combination" where global networks from partner countries can benefit, too.
"Most countries view the payments system as a logical extension of the banking system, which many consider to be an integral part of national sovereignty," he said. "We expect some combination of domestically developed payments schemes and/or countries allowing global payments operators (i.e. Visa and Mastercard) access to their markets."
Global payment companies like Visa and MasterCard already have a huge existing scale advantage, Faucette said —making them the logical low-cost alternative. And at the moment, China does not figure meaningfully into Morgan Stanley's investment for the "MVP stocks" — MasterCard, Visa, and PayPal.
Shares of PayPal have jumped 4% in the past month, Visa is up 6%, while Mastercard is up 8.5%. The stocks are outperforming the S&P 500, which is down about 0.4% percent in the same time period.
Much of the headwinds and slow down in globalization have to do with the China and the U.S.'s ongoing stalemate on trade. After back and forth retaliatory tariffs and President Donald Trump blacklisting Chinese telecom giant Huawei, Beijing has threatened to cut off its rare earth mineral supply to the U.S., which is crucial to the tech supply chain. The U.S. Defense Department is now looking to slow American reliance on rare earth materials from China.
The tariff worries spread to countries with exposure to Mexico after the president threatened to slap 5% duties on all Mexican imports on June 10. The tariffs will gradually increase to 25% in October if Mexico does not stem illegal immigration across its northern border, the White House said.
Trump announced on Friday that the U.S. had suspended the planned tariffs against Mexico indefinitely after reaching a deal to step up immigration enforcement.
Winners in this "slowbalization" backdrop are China internet stocks like Alibaba and small to mid-cap U.S. internet stocks like Yelp, according to Morgan Stanley. Groups with the most headwinds, or so-called "slowbalizers," are telecom, autos, semis, information technology and large U.S. tech stocks.
"For industries where the products and production processes are not critical to national or economic security, and their production is not benefited by an overseas supply chain, we think few changes will result from 'Slowbalization,'" Morgan Stanley analyst Michael D Zezas said in a separate note to clients Wednesday.