The tech sector faces a major headwind.
Transcript:
CONWAY GITTENS: What are the biggest risks then facing the tech sector right now. And I’m not necessarily talking about the stocks but the the the tech sector?
PATRICK MOORHEAD: Yeah yeah the biggest risks facing the tech sector right now are regulations bans and tariffs. Tariffs are a great way to motivate people to onshore more manufacturing, but it gets pretty ugly in between the time that you actually have to onshore and build factories. Here’s here’s an example a perfect example. Trump wants to tax TSMC and Taiwan 25 to 100% on chips that aren’t made in the United States. The challenge is it takes 3 to 4 years to build a leading edge chip factory, and so there’s literally no way to be able to comply with that.
A lot of people say it’s a negotiation. I do believe it is. But with tariffs you’re going to see increased prices. And with increased prices people generally buy less. So that is a a risk to the market. Yeah, I would say that is the that is the number one. That was the number one risk. I think there’s a risk of interest rates not going down. We can’t have home interest rates at 7% Food prices have not come down. And if again while inflation might be stabilized, we can’t forget that the prices of most things over the past four years went up between 20 and 25% And what happens is, if you have people who are spending their incremental money on food and housing and on energy, they’re going to buy less goods, which means everybody pulls back.
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