 The Market Sum | Insight after the bell
By Caleb Silver, Editor in Chief Thursday's Headlines 1. Trade Talks: Trump to meet Chinese delegation 2. The Most Sensitive Sectors to China U.S. Trade 3. Apple Nears an All-Time High 4. Saudi Aramco to Tap Pubic Markets to Raise $40 Billion 5. Fidelity Joins the Zero Commission Trading Party Markets Closed
 Image: Daniel Prudek / Getty Images
Markets Today
U.S. stocks rose after President Trump announced a meeting with China's chief trade negotiator in the White House on Friday, and the administration reportedly approved special licenses for certain U.S. firms to do business with Huawei Technologies Co., one of the Chinese firms that was blacklisted by the US Commerce Department in mid-May.
Those are pretty significant developments, and investors were clearly buoyed by the news. Industrial stocks, semiconductors and big tech companies like Apple all rallied on the day.
As we pointed out yesterday, this is the 13th time U.S. and Chinese trade negotiators have met since the U.S. imposed tariffs on China. Every one of these meetings has caused some market volatility, depending on the news. And while the U.S. stock market has rallied around 18% this year, it's still down year over year, and up only 6.5% since the U.S. first imposed tariffs specifically targeting China on July 6, 2018.
chart courtesy YCHARTS  6.5% is right about the average annual stock market return for the past 50 years, so while the market has traveled many miles since July of 2018, returns have been about average. That's why it's been so important to be aware of the news, but to not let it dictate your investment strategy.
Semiconductor stocks have been caught in the trade war crossfire for the past year and a half, especially since Huawei has been a focal point of the negotiations. Many U.S. semiconductor companies, like Micron are among Huawei's top suppliers.
But semis are also key components in smartphone sales. As the trade war heated up, Apple felt the pressure as China sales began to slow, and the prospect of a broader slowdown due to the trade war weighed on Apple's outlook.
But semis have been able to weather the trade storm and SOXX, the most popular semiconductor ETF, has risen over 15% since July of 2018.
chart courtesy YCHARTS  Apple has also been able to weather the storm, and then some. The company faced slowing sales of its iPhone X models, pressure to move production out of China, probes by the Justice Dept and Congressional committees, and a host of other issues. Today, it faced backlash by the Chinese government over an app it sells that allowed Hong Kong protestors to monitor police activity. Apple pulled that app, and took flack from all sides.
Still, shares of Apple have fought through the noise and are within a few points of another all-time high.
As an investor, you need to be able to weather the downturns if you want to enjoy the upside. Charlie Bilello, one of the great market researchers out there, tracker all of the major Apple drawdowns since 1984. There have been some precarious falls over the years, but the stock has climbed 56,000% since its IPO in 1980.  Saudi Aramco to test Public Markets Once upon a time, when oil was everything, Saudi Arabia's royalty thought its oil company, Saudi Aramco, the crown jewel of the kingdom, was worth $2 trillion.
A lot has happened since then, but the Kingdom still wants to tap the public markets to raise some much needed capital.
According to the Wall Street Journal, the investment banks tapped with trying to take Saudi Aramco public, will give their valuation recommendations tomorrow. According to the WSJ, the valuation will still be around $1.5 trillion, which is still staggering. Those investment bankers include Goldman Sachs, JPMorgan Chase and Morgan Stanley, among others. Aramco will go public on Saudi Arabia's Tadawul exchange. MBS, as the crown prince is known, ultimately plans to list at least 5% of Aramco, through a domestic and a later planned international listing, to raise billions of dollars to diversify Saudi Arabia's economy from its dependence on oil.
photo courtesy Saudi Aramco  Fidelity Joins the Zero Fee Crowd Fidelity Investments, the largest of the online brokerages with 21.8 million accounts, has announced that it has also joined the commission-free trading movement. Effective October 10, 2019, all U.S. stocks and exchange-traded funds (ETFs) will no longer incur a commission, and the base per-leg charge for options trades will also be eliminated. Options trades will be $0.65 per contract under Fidelity's new pricing.
The battle for more customers who will trade more frequently is in full force among U.S. based brokers, it's just getting started.
We've made this handy chart of all the brokers and their fees to help sort it out.  Correction: Yesterday we said that the U.S. China trade deficit was $54.9 billion. One of our smart readers (we have thousands) pointed out that the $54.9 billion is the entire U.S. trade deficit, not just China. Our apologies and thanks for the correction.
Source: https://www.census.gov/foreign-trade/balance/c0004.html
(chart courtesy YCHARTS)  Semiconductor manufacturer Skyworks Solutions rose 5.9% today as Cowen upgraded its stock to "Outperform" because of its exposure to consumers upgrading to 5G devices. Mining company Freeport-McMoRan also rose 5.9% on an upgrade from UBS to "Buy." Streaming service Netflix rose 5.2% on the publication of a Goldman Sachs client note expressing optimism about Netflix's ability to deal with competing streaming services.  Grocery store company Kroger dropped 4% after Jefferies downgraded its stock from buy to hold. Kroger, along with several other supermarket chains, is also dealing with a chicken recall due to listeria. Data services company NetApp fell 3.1% and marketer Omnicom Group slid by 2.7%. Word of the Day A drawdown is a peak-to-trough decline during a specific period for an investment, trading account, or fund. A drawdown is usually quoted as the percentage between the peak and the subsequent trough. If a trading account has $10,000 in it, and the funds drop to $9,000 before moving back above $10,000, then the trading account witnessed a 10% drawdown.  photo source: Los Angeles Times/Getty Images
Today in History October 10, 1913 Today in 1913, President Woodrow Wilson gave the signal to blow up the Gamboa Dike, letting water flow into the Panama canal. While the canal didn't open until the next year, the waters of the Pacific and Atlantic met in an event celebrated as the "Wedding of the Oceans." In 2018, over 440 million tons of shipping flowed through the canal.
(https://www.latimes.com/world/mexico-americas/la-fg-panama-canal-timeline-20160622-snap-htmlstory.html)
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