Bundle of investment news: quarantines in China, The Big Four and the IT Real Estate Market

Пачка инвестновостей: карантины в Китае, «Большая четверка» и рынок недвижимости для ИТ

New quarantines in China. Big Four checks. IT specialists will support the real estate market.

Disclaimer: when we talk about, that something has grown, we mean a comparison with the same quarter a year earlier. Since all issuers are from the USA, then all results in dollars. When creating the material, sources were used, inaccessible to users from the Russian Federation. We hope, Do you know, what to do.

Everyone went into quarantine: new coronavirus outbreak in China

This week in China recorded 5.37 thousand new cases of coronavirus. This is not such a large number of cases - but very much for the PRC. The government of the Celestial Empire has long adopted the tactics of zero tolerance: even if only one case is detected, quarantine can easily close an entire city or at least an area. And that's a problem for the world..

Quarantines of varying degrees of ferocity have been introduced in certain areas of Shanghai and Shenzhen - in total, both cities account for 16% China's exports. Shenzhen is, in fact, satellite city of Hong Kong, and in Hong Kong itself, there is a sharp increase in the incidence of the disease - so the island can also be closed for quarantine.. And given the, that Hong Kong is the most important transport and commercial hub for the whole of Asia, the impact of the current outbreak in China could prove dire for many S enterprises.&P 500. Shipping costs will rise even more, and the delivery time will increase.

By the way,, due to Foxconn restrictions, Apple's most important supplier, had to stop production, and Tesla stopped production in Shanghai - so you can mentally prepare, that this fact will affect the reporting of these companies. And many other businesses with production or a large share of supplies to China.

Check the inspectors: Big Four investigation

U.S. Securities Commission (SEC) initiated an investigation into the activities of the largest audit companies: Deloitte & Touche, Ernst & Young, KPMG and PricewaterhouseCoopers (PwC). The Commission will study the possible conflict of interest of these companies: whether they had shares in companies, whose accounts they studied, and whether their work was affected by other circumstances.

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Probably, during the investigation, something will become clear, and then the audit companies will make a deal with the investigation, under the terms of which they will pay a certain amount and will lag behind them. Since 2014, they have paid the SEC more than $ 30 million.

Much more problematic for investors may be uncovered facts of possible dishonest work of various issuers. May be, we are waiting for a wave of large-scale revisions of financial statements by issuers: The Big Four are auditing 66% U.S. issuers with a capitalization of more than 75 million. If it suddenly turns out, that some major issuer did not fully disclose something in its statements, then his shares could be seriously affected.

More construction work: where do IT specialists move to the USA and why it is important

The Brookings Institution analyzed information on the labor market in the US, and one of the most curious of the trends he noted was the rapid movement of IT professionals to cities and areas of the American South and to the American provinces away from Silicon Valley.. The largest influx of technology specialists is shown by the cities of Florida and Texas. Let's figure it out, what does this tell us?.

Firstly, technology companies get the opportunity, albeit not much, but still neutralize the growth of wages. For the need to keep specialists at the headquarters in New York or San Francisco, it was necessary to seriously pay extra. But with the transfer of employees to remote work, you can save a lot on salaries.. A person can work from the cheap Florida hinterland and live there like a king., and there is no need to include in his salary calculations for the payment of an expensive apartment in New York.

Secondly, stock-traded construction companies get an additional impetus to development: many of them have a large share of sales occupied by the markets of the southern states.. The influx of solvent audience from among IT specialists will support the demand for real estate, what, certainly, will be good.

However, all this will remain relevant only if, if the pandemic doesn't suddenly end.

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