| Insight after the bell
By Caleb Silver, Editor in Chief Thursday's Headlines 1. Tech Stocks get Chippy but Politics Ruins the Batter Markets Close
 Markets Today It was a mixed bag for U.S. markets today as tech stocks soared while the DJIA never had a chance to rally. How could it? Wilbur Ross went on TV to tell the world that the U.S. and China are "miles and miles" apart from any kind of deal. Even if that is true, why use the media pulpit as a negotiation tactic? Get back in the room with the trade representatives from Beijing and narrow that gap!
In the same interview with CNBC, Ross suggested that federal workers on furlough (not getting paid due to the shutdown), should just go and get a loan to pay their bills and feed their families. Really??!! It's been 34 days since this madness began. This afternoon, the U.S. Senate blocked two bills to fund the government and end the shutdown. One came from the Republicans and the other from Democrats.
Chips Ahoy! One sector of the market had an outstanding day on Thursday. Chip stocks had their best single day in a decade as several of them reported strong earnings, and more importantly, healthy outlooks for 2019.
Check out the SOXX ETF which tracks semiconductor (chip) stocks. It includes stocks like Nvidia (NVDA), Intel (INTC), Advancd Micro D (AMD), and Texas Instruments (TXN). It jumped 6% today (which is a big move for an ETF) and it's up 10% in the past month.  Why it Matters: As we noted yesterday, there are some healthy areas of the economy and the stock market - but a lot of them are getting drowned out by the political uncertainty surrounding the trade war and the shutdown.
Chip stocks is another one of those 'canary in the coal mine' sectors that signifies strength in technology. High demand for chips or semiconductors means that end demand for devices and components like phones, servers, laptops and tablets is strong.
A common theme from the earnings reports out of the chipmakers this morning is that demand is strong, and the onset of 5G capabilities is fueling that demand.
(Read more about why 5G is such a HUGE deal. )
If you have ever looked inside a modern cellphone, you will see several chips performing various functions - everything from flash memory to power management.
Take a look at this teardown of a Samsung Galaxy S4 from TechInsights. There are 5 chips in that phone, alone. There are more than 7 billion cellphones out in the world today by some estimates. You get the point...  Four out of the five top performers in the S&P 500 today were chip stocks:
What's crazy is that these were not even the best performing stocks of the day. That trophy goes to PG&E (PCG), the beleaguered California power company that was on the verge of filing for bankruptcy as it was initially implicated in the devastating Southern California wildfires last Fall. James has the details in our chart of the day, below.
Tax Talk We are rolling into tax season here in the U.S., and there are a lot of new rules and deadlines you should be aware of. We've laid out the most important ones on our TAX Section on Investopedia. Todays Headlines:
Chart of the Day: PG&E Stock Soars After Company Cleared of Causing Wildfire  Shares of Pacific Gas & Electric (PCG), California's largest utility owner, soared late Thursday. The stock's surge was prompted by an announcement from the California Department of Forestry and Fire Protection, or Cal Fire, that cleared PG&E of causing the deadliest California wildfire of 2017, which killed more than 20 people and destroyed more than 5000 buildings. The announcement by Cal Fire couldn't have come at a better time for the beleaguered company. PG&E has been plagued by lawsuits related to wildfires, its debt rating being slashed to junk status, and a looming Chapter 11 bankruptcy driven by the company's billions of dollars in potential liabilities.
After Cal Fire cleared PG&E, PCG shares popped a whopping 80%+ to a high of $14.50 at one point late in the trading day before closing out the day slightly below the intraday peak. While this was indeed an epic spike for the stock, however, we should keep things in proper perspective. Shortly after the company's last earnings release in early November, the stock plummeted from the high $40's by more than 60% to below $20 per share. By mid-January (last week), the stock had bottomed around a $5 trough. Since then the stock has struggled to climb above $8, until the substantial percentage surge on Thursday.
Where does the stock go from here? Despite the company being cleared for the 2017 wildfire, there are other fires that the company is still being investigated for, including an even larger one that occurred last November in Northern California. And the company's bankruptcy filing will very likely proceed as planned later this month. While the stock's relief rally on Thursday was indeed a second wind for the company, the likelihood of a sustained rebound and recovery for PCG remains low.
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Thursday, January 24, 2019
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