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Week of Apr 20 2018 Weekly Recap & The Week Ahead

April 23rd, 2018

“Twenty years from now, you will be more disappointed by the things that you didn’t do than by the ones you did do, so throw off the bowlines, sail away from safe harbor, catch the trade winds in your sails. Explore, Dream, Discover.” – Mark Twain

1. NAFTA Deal Seen Within Weeks — On the sidelines of the Summit of the Americas, Mexican President Enrique Pena Nieto, U.S. Vice President Mike Pence and Canadian Prime Minister Justin Trudeau said they thought a renegotiated NAFTA deal could be reached before Mexican elections on July 1, although they cautioned no deadlines had been set. Pence also revealed that the topic of funding for President Trump’s proposed border wall did not come up at the conference.
2. China Reports GDP Growth of 6.8% in Q1 — China’s economy grew 6.8% in the first quarter of 2018, despite widespread concerns about financial risks amid a government-led economic restructuring. “The U.S.-China trade friction can’t beat the Chinese economy,” added Xing Zhihong, a spokesman at the National Bureau of Statistics, as China slapped a hefty temporary deposit on imports of U.S. sorghum.
3. Investors Wary of Potential for Inverted Yield Curve — the yield curve from five to 30 years continued to flatten last week to as little as 29 basis points, the narrowest spread since 2007, and the gap between the two-year yield and the 10-year yield touched 41 basis points, also the smallest since before the financial crisis. A truly inverted curve “is a powerful signal of recessions” that historically has occurred “when the Fed is in a tightening cycle, and markets lose confidence in the economic outlook,” John Williams, the next president of the New York Fed, said this week, although he maintained that is not the case now. The tightening yield spread is raising concerns among investors and Fed officials, as the phenomenon has sometimes indicated a weakening longer-term outlook for U.S. economic growth and inflation.
4. EpiPen Shortage Plagues Canada – amid a growing shortage that has spared the U.S., Canada is working with the FDA to access supplies of Mylan’s (NASDAQ:MYL) EpiPen. The allergy antidote is made at a single Pfizer (NYSE:PFE) unit near St. Louis, Missouri, but it has been recently hit by manufacturing problems. According to Health Canada, four companies have authorization to sell epinephrine auto-injectors, but none are currently marketing them in the country.
5. U.S. Mulls Emergency Law on Chinese Investment — the U.S. Treasury Department is considering using an emergency law to curb Chinese investments in sensitive technologies as the Trump administration looks to punish China for what it sees as violations of American intellectual property rights. A law may be used known as the International Emergency Economic Powers Act, passed in 1977, which could affect foreign investment in industries like semiconductors and 5G.

The week ahead — Economic data from Econoday.com:

Week of Apr 13 2018 Weekly Recap & The Week Ahead

April 16th, 2018

“During major sustained advances in stock prices, which usually occupy from five to seven years of each decade, the investor can complacently hold a list of stocks which are currently unpredictable. He doesn’t worry about the top because he knows he is never going to sell at the top. He knows that the chances are overwhelming in favor of the assumption that he will get far better prices by waiting until after the top is passed and a probable reversal in trend can be identified than he will ever get by attempting to anticipate the top, and get out on the nose. In my own experience the largest profits we have ever taken have come from stocks purchased while they were making a new high in a market which was also momentarily expecting the top.
As I have already pointed out the absolute price of a stock is unimportant. It is the direction of the price movement that counts. It is always probable, but never certain, that the direction of the price movement will continue. Soon after it reverses is time enough to sell. You should sell when you wish you had sold sooner, never when you think the top has arrived. That way you will never get the very best price—by hindsight your individual transactions will never look daring. But some of your profits will be large; and your losses should be quite small. That is all that is necessary for a satisfactory, enriching investment performance.”
— Edgar S. Genstein

1. Nine West Files for Bankruptcy – Nine West Holdings filed for Chapter 11, listing debts of more than $1B. The company will use the bankruptcy to sell the Nine West and Bandolino businesses to Authentic Brands Group, while reorganizing around other brands including Anne Klein.
2. Venezuela Stops Paying Bond Holder — Venezuela stopped paying bondholders in September, according to central bank data, contradicting statements by President Maduro that the country would continue to honor its debts while negotiating a creditor restructuring. The debt crisis could hit another fresh low today as a $650M bond from Electricidad de Caracas matures with little hope it will get paid.
3. Google and AMA Team for Fostering Data Sharing — Google and other big tech companies are looking to partner with established industry players to promote innovation. Google (GOOG, GOOGL) is now teaming up with the American Medical Association, a physician lobbying group, on a plan to get startups to come up with the “best new ideas for fostering data sharing from health monitoring devices.”
4. Airlines Warned on Strikes Over Mediterranean Over Syria — Airlines have been warned to steer clear of the eastern Mediterranean over the weekend due to possible air strikes on Syria. The Trump administration reportedly won the support of France, the U.K. and Saudi Arabia and hit selected sites in Syria late Friday night.
5. AAII Weekly Sentiment — in this this latest weekly bullish sentiment, the bulls dropped from 31.9% down to 26.09%. This marked the fourth straight week of declining bullish sentiment and took the percentage of bulls to the lowest level since last August.

Also, In this week’s survey, bearish sentiment surged from 36.6% up to 42.75%. Bearish sentiment has now increased by more than 20 percentage points in the last four weeks and is at its highest level since last March.

6. GE Explores Hybrid Deals & Spinoffs – General Electric (NYSE:GE) is exploring a public offering for one of its divisions and is discussing hybrid deals with public companies to combine assets in a way that avoids a big tax bill, WSJ reports. Such moves would give GE and its shareholders a chance to participate in the turnaround of struggling businesses rather than risk selling at inopportune times.
7. Russia Weighs Sanctions on the U.S. — Russian lawmakers have drafted legislation in response to new U.S. sanctions. It would ban American food and agricultural products, tech equipment and software, medical products, and tobacco and alcohol. The draft also proposes barring cooperation on atomic energy and aerospace, and stopping U.S. firms from taking part in Russian privatization deals.
The week ahead — Economic data from Econoday.com:

Week of Apr 6 2018 Weekly Recap & The Week Ahead

April 9th, 2018

“There is only one side of the market and it is not the bull side or the bear side, but the right side.” ― Jesse Livermore

1. China Hits U.S. with Tariffs on 128 Products – In response to the Trump administration’s recently implemented tariffs on steel and aluminum, China has retaliated with tariffs on imports of 128 American-made products. The tariffs, which are hitting such products as wine and frozen pork, are as high as 25% and go into effect Apr 9. “We hope that the United States will rescind its measures that violate World Trade Organization rules as quickly as possible” said the Chinese Ministry of Commerce in an online statement. Furthermore, The Trump administration has imposed another $50B worth of 25% tariffs on China imports, to which China has responded with 25% tariffs on another 106 American products. The newest U.S. tariffs will impact some 1,300 Chinese products, including medical devices, batteries and machine tools, as well as some consumer products like television sets.
2. GM No Longer Report Monthly U.S. Auto Sales – General Motors stated in its latest report that it will do away with monthly U.S. vehicle sales reports – an industry standard – and switch to quarterly reporting. “Thirty days is not enough time to separate real sales trends from short-term fluctuations in a very dynamic, highly competitive market,” said Kurt McNeil, U.S. vice president, Sales Operations, in a GM press release.
3. First Quarter 2018 ETFs Asset Class Performance — courtesy of BIG, the S&P 500 (SPY), Dow 30 (DIA), and Nasdaq 100 (QQQ) all fell quite significantly in March, which was enough to drag both the S&P 500 and Dow 30 into negative territory for the quarter. Looking at S&P 500 sectors, the worst-performing areas in March were Financials, Materials, and Technology, while Energy and Utilities were actually up nicely. For the full first quarter, though, Technology and Consumer Discretionary were the only two sectors in the black.

4. Cyberattack On Four Gas Pipeline Companies — Bloomberg reported cyberattack that hit the operations of at least four gas pipeline companies in recent days also was felt in the utility industry. Duke Energy (NYSE:DUK) said it first learned of the attack on March 30 because it shares consumer data with third-party electricity and gas providers in Ohio through an electronic system run by Energy Services Group, the data firm that was hacked.
5. Trump Announced New Tariff Threat – President Trump has instructed the U.S. trade representative to look at $100B more in tariffs against China. “In light of China’s unfair retaliation, I have instructed the USTR to consider whether $100B of additional tariffs would be appropriate under section 301 and, if so, to identify the products upon which to impose such tariffs,” Trump said.

The week ahead — Economic data from Econoday.com:

Week of Mar 30 2018 Weekly Recap & The Week Ahead

April 2nd, 2018

“All truth passes through three stages. First, it is ridiculed. Second, it is violently opposed. Third, it is accepted as being self-evident.” – Arthur Schopenhauer

1. U.S., South Korea Revise Trade Deal – South Korea is next to escape President Trump’s metal tariffs after revising its six-year-old bilateral trade deal with the U.S. It will see Seoul double its import quota for American-made cars and reduce the amount of steel it sends into the United States. South Korea will also allow the U.S. to keep its 25% tariffs on pickup trucks in place for 20 more years.
2. Remington Seeks Bankruptcy Protection — America’s oldest gunmaker has filed for Chapter 11 bankruptcy protection after reporting negative operating cash flow as of March 25 of $7.4M. Like other gun manufacturers, Remington Outdoor saw sharp sales declines following the 2016 presidential election, as customers apparently saw less urgency to stockpile firearms under President Trump.
3. North, South Korea to Meet April 27 — North and South Korea will hold their first summit in more than a decade on April 27 after Kim Jong-un pledged his commitment to denuclearization. The meeting will take place on the southern side of the Demilitarized Zone. Japan has also sounded out the North Korean government about a bilateral summit, while Kim is scheduled to meet President Trump some time in May.
4. Walmart to Reduce Emissions in China – With President Xi Jinping vowing to slash pollution and prioritize living standards, Walmart (NYSE:WMT) has committed to cutting 50M metric tons of carbon emissions from its Chinese operations by 2030. That’s the equivalent of annual electricity consumption for 40M Chinese households. The plan involves retrofitting factories with energy-efficient facilities and lighting, and working with suppliers to switch to renewable energy.

The week ahead — Economic data from Econoday.com:

Week of Mar 23 2018 Weekly Recap & The Week Ahead

March 27th, 2018

“I measure what’s going on, and I adapt to it. I try to get my ego out of the way. The market is smarter than I am so I bend.” – Martin Zweig

1. Apple is Developing MicroLED Screens — Apple has made a “significant investment in the development of next-generation MicroLED screens” at a facility near its California headquarters, but consumers will “probably have to wait a few years before seeing the results.” MicroLED screens use different light-emitting compounds than the current OLED displays and promise to make future gadgets slimmer, brighter and less power-hungry. Its move into displays has the long-term potential to hurt a range of suppliers, from screen makers like Samsung Electronics Co., Japan Display Inc., Sharp Corp. and LG Display Co. to companies like Synaptics Inc. that produce chip-screen interfaces.
2. France Expects EU Tariff Exemption – the EU is expected to obtain a full exemption from new U.S. steel and aluminum tariffs that are due to kick in on March 23, according to French finance minister Bruno Le Maire. The European Commission has said that, if the bloc is not exempted, it could set duties of 25% on a range of U.S. products, whose annual imports to the EU are worth €2.8B.
3. U.S. Air Force to Test Fighter-Mounted Laser — the U.S. Air Force is set to begin testing a laser this summer that will be mounted on an F-15 warplane. With an output of about 50 kilowatts, the system will review abilities to zap drones or cruise missiles. The Pentagon awarded the $26M contract to Lockheed Martin (NYSE:LMT) last year for the laser program called SHiELD (Self-protect High Energy Laser Demonstrator).
4. Saudi Crown Prince meets with Lockheed, Boeing — Saudi Crown Prince Mohammed bin Salman will meet with officials from Boeing (NYSE:BA) and Lockheed Martin (NYSE:LMT) as part of a trip across the U.S. that could see $35B in deals signed. It follows Salman’s visit to the U.K., where Riyadh inked a military equipment MOU with the British government for 48 Typhoon jets from BAE Systems (OTCPK:BAESY).
5. Fed Raises Rates, Steepens Path of Hikes as Outlook Strengthens– the Federal Reserve raised rates for a sixth time since the policymaking Federal Open Market Committee began raising rates off near-zero in December 2015. “The economic outlook has strengthened in recent months,” the committee said in its post-meeting statement, a sentence that had not been in previous releases. Fed officials also raised their forecast for 2017 GDP growth from 2.5 percent in December to 2.7 percent, and increased the 2018 expectation from 2.1 percent to 2.4 percent.
6. Trump’s Plan to Impose Stiff Tariffs on China — President Trump signed a memorandum “targeting China’s economic aggression.” Tariffs on Chinese imports worth as much as up to $60B could be unveiled, stoking fears of a global trade war. Beijing noted it will take measures against the 128 U.S. products in two stages – that cover about $3B and $1.9B, respectively – if it cannot reach an agreement with Washington. Legal action under WTO rules will also be considered.
7. Trump Fired National Security Adviser McMaster, Replaced with John Bolton — President Trump has named John Bolton as his new national security adviser, succeeding Lt. Gen. H.R. McMaster. The move follows fresh appointments to the roles of national economic advisor and Secretary of State. Bolton was the former U.S. ambassador to the United Nations under President George W. Bush.

The week ahead — Economic data from Econoday.com:

Week of Mar 16 2018 Weekly Recap & The Week Ahead

March 19th, 2018

“when the facts change, you must change your mind” – unknown

1. China Scraps Presidential Term Limits, Clearing Way for Xi’s Indefinite Rule — China’s parliament voted to repeal presidential term limits, allowing President Xi Jinping to keep power indefinitely in a formal break from succession rules set up after Mao Zedong’s turbulent rule. The votes gives Xi more time to enact plans to centralize party control, increase global clout and curb financial and environmental risks. It comes after the U.S. reportedly asked China to import more cars, aircraft, soybeans and natural gas as part of a plan to cut its bilateral trade deficit by $100B and avoid placing tariffs on Chinese imports.
2. Trump Issues Order to Block Broadcom Takeover of Qualcomm – President Trump has issued an order to block Broadcom’s (NASDAQ:AVGO) hostile takeover of Qualcomm (NASDAQ:QCOM). The order states “There is credible evidence that leads me to believe that Broadcom … through exercising control of Qualcomm … might take action that threatens to impair the national security of the United States,” .
3. Democrat Conor Lamb Apparent Winner of Pennsylvania Special Election — Democrat Conor Lamb is the apparent winner of a House seat in Pennsylvania’s 18th congressional district, a region President Trump won by 20 percentage points in 2016. The election was watched nationwide as a sign of political tides eight months ahead of congressional elections.
4. Facebook, Google Cracks Down on Crypto Advertising — following a similar hard-line approach taken by Facebook (NASDAQ:FB), Google (GOOG, GOOGL) will ban crypto-related advertising starting in June, including ICOs, wallets, and trading advice across any of its platforms. Google’s director of sustainable ads stated “We don’t have a crystal ball to know where the future is going to go with cryptocurrencies, but we’ve seen enough consumer harm or potential for consumer harm,” .
5. GE Begins Flight Trials for World’s Largest Jet Engine – General Electric has begun flight trials of the world’s largest jet engine after several delays caused by technical problems. The GE9X will power the Boeing (NYSE:BA) 777-9 and 777-8, which are scheduled to enter service in 2020 and 2022, respectively. Despite the problems, GE feels “very confident” it will meet a 2019 target date for safety certification, said spokeman.
6. Ford Sets Aggressive Hybrid Timetable — Ford (NYSE:F) announced it’s going all-in on hybrids. 75% of its lineup will be replaced in the hybrid push, while the automaker will add four new trucks and SUVs. The news comes as UBER discusses the possibility of installing its self-driving systems in Toyota (NYSE:TM) minivan models, expanding its partnerships with outside companies.

The week ahead — Economic data from Econoday.com:

Week of Mar 9 2018 Weekly Recap & The Week Ahead

March 12th, 2018

“Be fearful when others are greedy and be greedy when others fearful.” — Warren Buffett

1. China Sets Growth Target at ‘about 6.5%’ — China’s National People’s Congress has officially kicked off with over 3,000 lawmakers descending on Beijing, where the country’s rubber-stamp parliament is expected to eliminate the two-term limit for the presidency. Continuing a campaign to reduce risks in China’s financial system, Premier Li Keqiang also set a target for economic growth for 2018 at “about 6.5%,” a slight recalibration from last year’s objective of “around 6.5% or higher if possible.”.
2. Senate to Vote on Dodd-Frank Rollback — Senate Majority Leader Mitch McConnell has filed a motion to have a procedural vote on a bill, sponsored by Senate Banking Committee Chairman Mike Crapo, that would roll back key regulations of Dodd-Frank. The measure spikes the asset level at which a bank becomes “systemically important” from $50B to $250B, freeing dozens of regional banks from stringent rules like additional capital buffers and stress tests.
3. Gary Cohn Announced His Resignation as Top Economic Adviser to President Trump — widely viewed as a voice for Wall Street in the White House, Gary Cohn has announced his resignation as the top economic adviser to President Trump, fanning fears of protectionist tariffs and a full-blown trade war. Trump tweeted he “will be making a decision soon” on replacing Cohn, who oversaw a major revamp of the U.S. tax code and pushed for a significant rewrite of financial rules.
4. AAII Weekly Sentiment Survey — in this week’s sentiment survey from AAII, bullish sentiment dropped nearly 11 percentage points falling from 37.28% down to 26.4%. That’s the lowest weekly reading since the end of August and the largest two-week decline since June 2013.

However, bearish sentiment hasn’t seen much of a bounce. At 28.38%, it is slightly higher than bullish sentiment, but it has been higher as recently as early February.

5. Trump Agrees to Meet N. Korean Leader on De-nuclearization Talks — President Trump has agreed to an invitation from North Korean leader Kim Jong-un to meet to discuss denuclearization. Kim made the invitation for Trump to come to North Korea in a letter hand delivered by South Korea’s national security adviser Chung Eui-yong, and Trump said he would meet by May, though the White House is now saying the time and place of the meeting is yet to be determined. Kim says he’s prepared to suspend nuclear and missile tests in the meantime.

The week ahead — Economic data from Econoday.com:

Week of Mar 2 2018 Weekly Recap & The Week Ahead

March 5th, 2018

“We learn from history that we do not learn from history,” — George Wilhelm Friedrich Hege

1. Apple is Launching Medical Clinics – Apple is launching a group of medical clinics called AC Wellness to deliver the “world’s best healthcare experience” to its employees and their families, CNBC reports. A quietly published website, acwellness.com, said the Apple (NASDAQ:AAPL) initiative will begin this spring. The news comes as Amazon announced an effort with Berkshire Hathaway (BRK.A, BRK.B) and JPMorgan (NYSE:JPM) to improve the healthcare of their employees.
2. GE to Restate Two Years of Earnings — General Electric plans to restate the last two years of corporate profits, resulting in a cut of $0.13 in reported earnings per share for 2016 and $0.16 per share for 2017. The reduction comes as the conglomerate adopts new accounting standards for recognizing revenue from long-term contracts amid an SEC investigation into the method. GE will make the restatements on April 20.
3. U.S. to Imposed Heavy Duties on Aluminum Foil from China — the U.S. Commerce Department has imposed duties as high as 106% on aluminum foil from China after concluding that the country’s producers are dumping the product in the U.S. and receiving unfair government subsidies. In response, China’s Ministry of Commerce expressed “strong dissatisfaction” with the action and will take necessary measures to protect its legal rights and interests.
4. Energy ETF Closes February with Worst Monthly Drop Since December 2015 — the largest energy ETF (XLE) fell 10.8% for February, its worst monthly showing since December 2015. Prices for the April WTI contract settled 4.8% lower in February, the first monthly loss since August, while Brent crude fell 4.7% for the month in its first monthly loss since June. Also, Sundial Capital Research’s Jason Goepfert notes that “this is the first time since December 2015 that the S&P 500 has gained 1% or more for two straight days only to drop 1% or more on each of the next two days. That doesn’t happen very often, just 23 times since 1928. Here’s the rub: “All but 3 of them occurred during bear markets,” Goepfert writes. “Because it tended to occur in downtrends, future returns were poor, with declines over the next 30 days 65% of the time averaging -1.9%,” Goepfert writes.
5. SEC Launches Sweeping Probe Into Cryptocurrencies — the SEC has issued scores of subpoenas and information requests in a sweeping probe of technology companies and advisers involved in the booming market for digital tokens, the Wall Street Journal reports. The investigation significantly ratchets up the regulatory pressure on the booming U.S. market for raising funds in cryptocurrencies. Coin offerings raised $6.5B in 2017 and more than $1.6B so far this year despite a crash in the price of Bitcoin and other cryptocurrencies.
6. Trump’s Announcement Tariffs on Steel and Aluminum — Trump plans to impose tariffs of 25 percent on steel imports and 10 percent on aluminum. However, he didn’t elaborate on the details, saying the formal announcement will come next week. The EU said that it could target imports of Harley Davidson Inc. motorbikes, Levi Strauss & Co. jeans and bourbon whiskey as part of its response. Many nations are making a last-ditch attempt to have their nation’s steel and aluminum exempt from the action, a targeted strategy the U.S. Defense Department had voiced support for. Meanwhile, Canadian and Brazilian steel comprised a respective 16% and 13% of U.S. steel imports as of September 2017, while China, frequently criticized politically for dumping cheap steel on trade partners, is not one of the top 10 exporters of steel to the U.S., the report said. Meanwhile, top foreign sources of aluminum during 2013-16 included Canada (56%), Russia (8%) and the United Arab Emirates (7%).

The week ahead — Economic data from Econoday.com:

Warren Buffett Annual Letter to Shareholders Highlights

February 27th, 2018

See the link below for the annual investor letters.

Here are some of the highlights:

1. Deal-making CEOs
In explaining why he thinks it’s so difficult to find stand-alone companies to buy at a “sensible” price, Buffett blames a buying frenzy driven in part by overly eager corporate managers who are egged on by their boards:
“If Wall Street analysts or board members urge that brand of CEO to consider possible acquisitions, it’s a bit like telling your ripening teenager to be sure to have a normal sex life.”

2. On leverage and sleeping well
“Our aversion to leverage has dampened our returns over the years. But Charlie and I sleep well. Both of us believe it is insane to risk what you have and need in order to obtain what you don’t need.”

3. Stop on in
Buffett touts one of the deals Berkshire did get done in 2017, its acquisition of a 38.6% partnership interest in travel-center operator Pilot Flying J, or PFJ. He offers this plug:
“When driving on the Interstate, drop in. PFJ sells gasoline as well as diesel fuel, and the food is good. If it’s been a long day, remember, too, that our properties have 5,200 showers.”

4. Liquidity and the ‘kindness of strangers’
In a discussion of Berkshire’s insurance float—the pool of money collected from premiums but not yet paid out in claims—Buffett talks about the desire for ample liquidity:
“Charlie and I never will operate Berkshire in a manner that depends on the kindness of strangers—or even—that of friends who may be facing liquidity problems of their own. During the 2008-2009 crisis, we liked having Treasury bills—loads of Treasury bills—that protected us from having to rely on funding sources such as bank lines or commercial paper.
“We have intentionally constructed Berkshire in a manner that will allow it to comfortably withstand economic discontinuities, including such extremes as extended market closures.”

5. ‘In America…’
Buffett regularly argues that the very long-term outlook for the U.S. economy—and stocks SPX, -1.27% —is undeniably bullish:
“Charlie and I view the marketable common stocks that Berkshire owns as interests in businesses, not as ticker symbols to be bought or sold based on their ‘chart’ patterns, the ‘target’ prices of analysts or the opinions of media pundits. Instead, we simply believe that if the businesses of the investees are successful (as we believe most will be) our investments will be successful as well. Sometimes the payoffs to us will be modest; occasionally the cash register will ring loudly. And sometimes I will make expensive mistakes.
“Overall—and over time—we should get decent results. In America, equity investors have the wind at their back.”

6. Watch those fees
Buffett is a stock picker, but he’s adamant most investors are better off sticking with passive, low-cost, index-tracking products. In a section where he again bashes Wall Street and hedge funds, he reminds:
“Performance comes, performance goes. Fees never falter.”

7. ‘Willingness to look foolish’
“Though markets are generally rational, they occasionally do crazy things. Seizing the opportunities then offered does not require great intelligence, a degree in economics or a familiarity with Wall Street jargon such as alpha and beta. What investors then need instead is an ability to both disregard mob fears or enthusiasms and to focus on a few simple fundamentals. A willingness to look unimaginative for a sustained period—or even to look foolish—is also essential.”

Here is the full annual Buffett 2017 Letter.

Week of Feb 23 2018 Weekly Recap & The Week Ahead

February 27th, 2018

“Volatility is greatest at turning points, diminishing as a new trend becomes established.” George Soros

1. China to Retaliate Against U.S. Metal Tariffs – It’s the latest trade tension escalation between the world’s top two economies. China has threatened retaliation after the Trump administration received a green light to impose steep tariffs on aluminum and steel imports on national security grounds. “If the final decision from the U.S. hurts China’s interests, we will definitely take necessary measures to protect our rights,” said Wang Hejun, a senior official at China’s Commerce Ministry.
2. Apple Looks to Buy Cobalt Directly from Miners — Apple is in talks to buy long-term supplies of cobalt directly from miners for the first time, seeking to procure “several thousand” metric tons of cobalt per year for a period of at least five years, Bloomberg reports. The strategy is designed to buffer Apple’s (NASDAQ:AAPL) reserves of the key lithium ion battery ingredient amid industry fears of a shortage driven by the electric vehicle boom.
3. United Technologies to Consider Breakup Decision in 2018 — United Technologies (UTX) is studying a plan to split up a portfolio that includes aerospace, elevators and air conditioners, with a decision to be announced by the end of this year. “The real question is do you get a significant multiple expansion by having separate companies,” CEO Greg Hayes told the Barclays investor conference in Miami.
4. Chinese Regulator Seizes Control of Anbang Insurance Group– the Chinese government has seized control of Anbang Insurance Group and said its chairman had been prosecuted, in a striking move that highlights Beijing’s willingness to crack down on financial risk and curtail debt-laden conglomerates. Anbang is said to have violated laws and regulations that “may seriously endanger the solvency of the company,” following acquisitions including the Waldorf Astoria and insurers in Europe and Asia.

The week ahead — Economic data from Econoday.com:

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