They arrested who?!

On December 1st, Huawei Technologies CFO Meng Wanzhou was arrested in Vancouver and is now facing extradition to the U.S. While this could be seen as an act of foreign aggression, China is still moving forward with the tariff truce. What does all this mean for tech investors? You are receiving this email because you subscribed to Wealth Daily. [Click here]( to manage your e-mail preferences. [Wealth Daily logo] They arrested who?! [Jason Stutman Photo] By [Jason Stutman]( Written Dec. 09, 2018 Meng Wanzhou. You've probably never heard the name before this week, but her recent arrest warrants the attention of anyone with interest in the consumer technology industry. These days, that pretty much amounts to everyone, but the news should be of particular interest to the investment community. Meng Wanzhou is not your typical detainee. She's the daughter of the founder of one of China's largest technology giants. She's also the CFO of that very same company, none other than Huawei Technologies. While most Americans may tilt their heads thinking, “Hua-what?” Huawei Technologies is nothing to scoff at. The firm ranks as one of the largest technology companies in the world. By revenue, it comes in at number seven, right between U.S. tech giants Microsoft and IBM. Huawei has historically been billed as a Chinese telecom giant, but the company has recently expanded to become much more diversified in its product offerings and international reach. Bank 1,000% on the Death of Comcast America’s most hated cable company is standing on its last leg. And it’s not because of terrible customer service or mediocre products. It’s because of a technological shift that’s scheduled to start in late-2018. It's a shift that could earn you 1,000% gains as three companies bring down big cable. [Click here for their ticker symbols.]( Notably, Huawei has grown its global share of smartphone shipments substantially over the last half-decade or so. Since 2012, the company has managed to climb from 3.3% of quarterly global smartphone shipments to 15.8%. For perspective, Apple Inc. (NASDAQ: AAPL) only claims 12.1% of global shipments. Granted, we're talking units shipped and not revenue here, but, as it trails only behind Samsung in the former regard, it's safe to say that Huawei is on par with the biggest device makers in the world. With that context in mind, the arrest of Huawei darling Meng Wanzhou represents a highly sensitive political ordeal. Meng was arrested in Vancouver on December 1st and is now facing extradition to the U.S. News of the arrest became public this week. If we're to swap shoes for a moment, this is akin to Russia arresting Apple CFO Luca Maestri and extraditing him to China. To most Americans, this would be seen as an act of foreign aggression. Not surprisingly, China is demanding that Canada and the U.S. immediately release Meng and clarify the reasons for her detention. At the time of this writing, though, that has not happened. While the specific charges remain unknown, there's not too much to speculate on here. The U.S. has been probing Huawei over violations relating to sanctions against Iran, so it's safe to assume there's a connection there. Considering the politically embarrassing arrest for China, many were initially concerned that the recent 90-day tariff truce between the U.S. and China could fall apart. But China announced in a regular press briefing on Thursday that it would "immediately" implement the measures agreed upon at G-20. China's unwillingness to escalate tensions further in the midst of Meng's arrest could be a telling signal. The nation's leaders, at least at the moment, seem to be ceding ground to the U.S. But if that's the case, then why? America's Leverage: Next-Generation Networks As a backdrop to Meng's arrest, a growing coalition of Western countries is moving to restrict the use of Huawei technology. Specifically, the U.S., Australia, and New Zealand have all blocked the use of the company's telecommunications equipment in infrastructure for upcoming 5G mobile networks. Even Japan is currently planning to ban the use of Huawei's technology. Additionally, UK telecom firm BT Group (NYSE: BT) confirmed on Wednesday that it would not be buying 5G equipment from Huawei. In doing so, the West has thrown a major wrench into the company's ambitions in next-generation tech. After all, virtually every emerging technology worth investing in over the next decade will be powered by 5G. In being cut out of the infrastructure at this critical period of deployment, Huawei's technology leadership within telecom will now likely be contained to the Asia Pacific region. To date, there have only been three companies to release a 5G chipset, the component that will allow smartphones and other mobile devices to connect to 5G networks. Two of those companies are located in the U.S.: Intel Corporation (NASDAQ: INTC) and Qualcomm Inc. (NASDAQ: QCOM). The other company is Huawei. Some would argue, actually, that Qualcomm is the only company to have yet produced a "real" 5G chipset with its Snapdragon 855. The 855 will be the first to appear in purchasable 5G phones, but that's a bit beside the point. Only 1 in 100 Will Make 10,000%! Investing a $10,000 nest egg in the S&P 500 back in 1981 would have netted the average investor a respectable $210,000 today. But that’s nothing compared to the $5.5 million that the same investor would now be worth had they parked that same $10,000 in Apple Computer, Inc. when it first sold shares to the public. Buying into leading companies in the fastest-growing industries right as they hit the market is the only way to generate life-altering financial returns. [Click here for all the details on the Apples of tomorrow!]( The takeaway here, if it wasn't apparent already, is that a battle is brewing between nations over technological leadership, particularly as it relates to 5G. The West is forgoing the benefits of free market trade in favor of technological isolationism. Fears over foreign espionage and privacy violations, coupled with insecurity about economic leadership, have led to this new trade dynamic. More than any other nation, this hurts China, which is likely why the country's leaders are being so timid around Huawei. Just as we watched happen with telecom giant ZTE, China could be folding to reach appeasement. Perhaps the biggest concern of the West is Huawei's 5G chipset, as it contains the potential for spying on consumers. Huawei has denied all allegations that it could be collecting intelligence for the Chinese government, but that will obviously be taken with a grain of salt. All the while, America has been making major strides in penetrating the international market with 5G. Qualcomm has already found its way into Samsung's 5G-powered Galaxy S10, expected in the first half of 2019. More crippling for Huawei, Qualcomm has found its way into competing Chinese devices as well. China Mobile Communication Group, Xiaomi, OnePlus, OPPO, Vivo, and ZTE are all developing 5G mobile devices featuring the Snapdragon 855. The obvious indication here is that Huawei's 5G chipset probably isn't any good. The only mobile device OEM planning to use the chipset seems to be Huawei itself. Clearly, this is all great news for Qualcomm, but it's also good news for American companies providing 5G infrastructure. With Huawei being boxed out of major Western markets, this is just another competitive edge for U.S. 5G firms. And with the world's first 5G smartphones just months away, [this select group of stocks is seriously heating up](. Until next time, [JS Sig] Jason Stutman [follow basic]( [@JasonStutman on Twitter]( Jason Stutman is Wealth Daily's senior technology analyst and editor of investment advisory newsletters Technology and Opportunity and The Cutting Edge. His strategy for building winning portfolios is simple: Buy the disruptor, sell the disrupted. Covering the broad sector of technology and occasionally dabbling in the political sphere, Jason has written hundreds of articles spanning topics from consumer electronics and development stage biotechnology to political forecasting and social commentary. Outside the office Jason is a lover of science fiction and the outdoors, and an amateur squash player at best. He writes through the lens of a futurist, free market advocate, and fiscal conservative. Jason currently hails from Baltimore, Maryland, with roots in the great state of New York. Enjoy reading this article? [Click here]( to like it and receive similar articles to read! Browse Our Archives [What’s the Deal with Yield?]( [The Scariest Moment in Human History]( [Tariff Man Bankrupts Farmers]( [The 5G Tech Revolution Is Here]( [Santa Claus Rally Is ON!]( --------------------------------------------------------------- This email was sent to {EMAIL}. It is not our intention to send email to anyone who doesn't want it. If you're not sure why you've received this e-letter, or no longer wish to receive it, you may [unsubscribe here](, and view our privacy policy and information on how to manage your subscription. To ensure that you receive future issues of Wealth Daily, please add newsletter@wealthdaily.com to your address book or whitelist within your spam settings. For customer service questions or issues, please contact us for assistance. [Wealth Daily](, Copyright © 2018, [Angel Publishing LLC](. All rights reserved. 111 Market Place #720 Baltimore, MD 21202. The content of this site may not be redistributed without the express written consent of Angel Publishing. Individual editorials, articles and essays appearing on this site may be republished, but only with full attribution of both the author and Wealth Daily as well as a link to www.wealthdaily.com. Your privacy is important to us -- we will never rent or sell your e-mail or personal information. [View our privacy policy here.]( No statement or expression of opinion, or any other matter herein, directly or indirectly, is an offer or the solicitation of an offer to buy or sell the securities or financial instruments mentioned. While we believe the sources of information to be reliable, we in no way represent or guarantee the accuracy of the statements made herein. [Wealth Daily]( does not provide individual investment counseling, act as an investment advisor, or individually advocate the purchase or sale of any security or investment. Neither the publisher nor the editors are registered investment advisors. Subscribers should not view this publication as offering personalized legal or investment counseling. Investments recommended in this publication should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company in question.