News Summary: April 17

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A quick list of shortcuts: DoJ (Dep’t of Justice), ECB (European Central Bank), EZ (Euro Zone), EU (European Union), BoE (Bank of England), BoJ (Bank of Japan), example: BoX (Bank of X country), SCOTUS (Supreme Court), Ccy (Currency), WH (White House), HY (high yield – bonds), IG (investment grade – high quality bonds), OECD (Org for Economic Coopeartion & Dev)

News for Week of 4/13/2015 – 4/17/2015

Government / Political / Economic

  1. The US is expanding its role in Saudi Arabia’s campaign in Yemen amid growing concerns about the goals of the Saudi-led mission.
  2. The US is expanding a campaign to ensure that Iran doesn’t supply game-changing weapons, such as surface-to-air missiles, that would threaten Saudi-led airstrikes on the Houthis.
  3. The US is protesting an “unsafe” intercept of a US spy plane by a Russian fighter over the Baltic Sea – talk about trying to make lemonade out of less than nothing!
  4. A cybersecurity report accused Chinese-based hackers of a spying campaign.
  5. The Kremlin lifted its self-imposed ban on the delivery of a powerful S-300 air-defense installation to Iran, provoking immediate criticism from the WH and Israel.
  6. Senators forged a bipartisan deal to give Congress review power over an Iran nuclear deal. WH said Obama would sign the bill.
    1. Call me skeptical, but this sounds like neither party is particularly confident in getting the presidency in 2016.
    2. Iran’s president accused US Congress of meddling in sensitive nuclear talks, signaling potential new obstacles.
  7. Chris Christie called for Social Security cuts, as the potential presidential candidate cast himself as a ‘fiscal truth teller.’ I actually like Christie a lot, and I like “fiscally intelligent” politicians, but this is ridiculous, cutting Social Security now!?
  8. Support is up for the Boston Olympics, but still exceedingly low. I remember a recent 60 minutes piece stating that most Olympics ended up being a drain on the local economy (Sochi, Athens, even Atlanta). 

General Markets / Economic

  1. Chinese trade data is pointing to weak growth, with falling exports and a sharp drop in China’s monthly trade surplus. This is placing more pressure on Beijing to ease fiscal and monetary policy
    • And their economy began the year on a downbeat note, growing at a 7% annual rate last quarter, the slowest since 2009.
  2. US budget gap widened slightly in the first half of fiscal 2015, ending a streak of sustained declines.
  3. Japan dethroned China as the top foreign holder of US Treasuries for the first time since the financial crisis.
  4. The IMF expects little pickup in global economic growth this year amid slowing output in major emerging markets.
  5. Recent soft economic data has the Fed leaning AWAY from raising rates this June.
  6. Saudi Arabia will open its $530B stock market to foreign investments in June.
    • They’re likely doing this to try and prop UP their stock market and get foreign investors to increase demand.

Company News

  1. Qualcomm is under pressure from activist investors to consider spinning off their chip unit from their patent-licensing business.
  2. VW’s controlling families are battling over the future leadership of the company as the auto maker’s CEO vowed to resist efforts to oust him.
  3. KPMG agreed to acquire the assets of HealthCare consulting firm Beacon Partners.
  4. Boeing and Lockheed plan a new rocket with reusable engines, part of an effort to counter rival SpaceX.
  5. Nokia is close to buying France’s Alcatel-Lucent in a deal aimed at creating European telecom giant to fend off Chinese rivals.
    • Deal is set at $16.6B in an all-stock deal
  6. Netflix added a better than expected 4.88m streaming customers last quarter, helped by overseas growth – I guess the series Marco Polo was a hit?
  7. Avon is exploring options including a sale of the company or its struggling North American biz.
  8. The EU is set to file charges against Google for violating the blocs antitrust laws.
  9. Schlumberger is cutting 11,000 more jobs as it posted a 39% profit drop amid a slowdown in oil-and-gas drilling.
  10. Verizon will be breaking the PayTV bundle, allowing customers to buy only the channels they want!
    • For those that don’t know, your $79 or $99 or $XX cable bill is divvied up according to set prices for each channel that the networks reach in agreement with your cable operator
    • This is almost certainly going to lead to MORE expensive channels. Why? Well, let’s say company A owns TV channels L, M, and N. If M and N are in lower demand and L is loved by consumers, what happens is that the owner will subsidize losses from M and N by overcharging for L. HOWEVER, if people now individually want to buy N, the owner isn’t going to charge 90 cents per month like they did previously, but rather mark up their price because they can no longer subsidize losses with income from channel L and channel N is now $1.20 a month! 

Interesting Stories

  1. Amazing! Engineers and scientists are turning to 3D printers as a way to build tools, spare parts, and other ‘things’ for the international space station!
  2. Companies are thinking about trademarking scents! Bye-bye cheap imposters at the drug store.
  3. No way! JetBlue and MCR are in talks to turn the TWA terminal at NY’s JFK airport into a hotel!
  4. Ticket takers at the home of the Anaheim Angels have reportedly objected to the team’s demand to work through the singing of the national anthem. Apparently, working through the anthem would help keep the crowd moving and improve security.
  5. A Washington state couple became unwitting players in a kidnapping investigation this week after discovering that the 2 year old child they were babysitting had been abducted and was the subject of an Amber Alert.

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