Tech’s downturn and two half hitches

So farewell then H1 2022. Tech investors may look back in angst at their losses in the first half of the year.

It was the worst in the US for S&P 500 companies in more than 50 years, with a fall of 20.6 per cent in the index. The tech-heavy Nasdaq outdid it, however — down almost 30 per cent from the start of the year. Rob Armstrong’s Unhedged newsletter takes a look at the depressing half-time numbers.

The half ended with Micron Technology’s earnings. The memory chipmaker has already put a damper on the second half — guidance for its August quarter was well below Wall Street expectations. It predicted $7.2bn in revenues, down 17 per cent quarter-on-quarter and compared to an analyst consensus of $9.3bn. Micron blamed weakening smartphone and PC sales, demand and supply issues in China, and elevated inventory levels among its cloud computing customers.

On Thursday, the Gartner research firm said worldwide PC shipments were on pace to decline 9.5 per cent in 2022 and global mobile phone shipments would fall 7.1 per cent.

“A perfect storm of geopolitics upheaval, high inflation, currency fluctuations and supply chain disruptions have lowered business and consumer demand for devices across the world, and is set to impact the PC market the hardest in 2022,” said Ranjit Atwal, senior director analyst at Gartner.

If anyone was counting on crypto as a hedge for first-half investments, they were sorely disappointed. What happened to the supposed zero correlation between crypto and traditional assets? asks Ian Taylor of the CryptoUK trade association. Bitcoin fell almost 60 per cent in value in the first six months, its worst first half in history.

Our analysis suggests the crypto carnage has one silver lining: the broader financial system has been spared.

“This contagion did not extend into the traditional banking and finance sector,” Michael Hsu, the acting US comptroller of the currency, told the FT. “This is due, at least in part, to federal bank regulators’ continued and intentional emphasis on safety, soundness and consumer protection.”

Late on Thursday, the EU followed suit. It reached a landmark deal to regulate trading of crypto assets in the bloc — an effort to protect consumers and rein in what lawmakers call the “wild west” of financial markets.

The Internet of (Five) Things

1. Former Apple lawyer admits insider trading
A former top lawyer at Apple responsible for enforcing insider trading policies has pleaded guilty to insider trading himself, in a scheme that spanned five years. Gene Levoff, previously the co-chair of Apple’s disclosure committee, admitted six criminal counts of security fraud relating to more than $14mn of trades he undertook between 2011 and 2016.

2. TikTok works to ease US security concerns
After President Trump tried to ban it, Chinese-owned social media app TikTok has sought to reassure US lawmakers over its data practices. In a letter to nine Republican senators, chief executive Shou Zi Chew said the app was working on “compliance with a final agreement with the US government that will fully safeguard user data and US national security interests”, based on Oracle helping it ensure all American user data is stored in the country.

3. Hong Kong exchange set to get Soul
Tencent-backed social media app Soul is vying for a listing in Hong Kong after abruptly pulling a plan to sell shares in the US last year. The app lets users pick avatars and interact in the metaverse, with many of its 32mn Chinese users flocking to it for dating.

4. Amazon qualifies for Champions League
Amazon will begin streaming European Champions League football matches in the UK from 2024, as the online retailer and video platform moves to expand its footprint in live sports. The three-year deal, announced on Friday, echoes Amazon’s arrangement with the English Premier League, in which it has offered a small number of games to its Prime users as part of their subscriptions.

5. Cisco’s bid to bring digital city back to life
San Francisco is the “most extreme” case of workers not returning to a major city, says Professor Nicholas Bloom, a Stanford University economist. “Tech was already moving remote,” he notes. Read Dave Lee on the post-Covid fate of the city by the bay, part of our Future of Cities special report.

Tech tools — Hisense’s new TV range

Budget Chinese TV maker Hisense appears to be heading upmarket with its new range launching in the UK this month. The cheapest model being announced is the £899 55in U7HQ (pictured), part of its “medium level” 4K TV offerings. There is a game mode and U7H is the official TV of the Qatar FIFA World Cup. Hisense’s new flagship model is the catchily named U8HQ. The 65in version costs £2,299 and uses mini-LED tech for backlight control and colour management. There are also 100in laser TVs being launched at £3,999.