News for the Week of April 2-6, 2018
General Markets / Economic
- Iraqi stock market listed firms are among the world’s top performers as investors bet on the country’s economic recovery
- China imposed tariffs on a range of US goods, following through on a promise to retaliate against penalties on imports of Chinese steel and aluminum
- The EPA moved to ease vehicle-emission rules, siding with car makers and setting up a fight with environmentalists and California
- US aluminum prices are falling despite a tariff aimed at boosting domestic output of the metal
- Economics 101: when a product travels a lesser distance, the cost of shipping (or the overall costs) decreases
- Deal talks between Walmart and Humana are deepening anxiety in a hospital sector grappling with sluggish growth
- GM will stop reporting monthly car sales, saying a 30-day period doesn’t give an adequate snapshot of its business or the industry I’ve been following GM for years (a decade plus) and have never found this insightful. What caused them to conclude this now and not a decade ago!?
- US automakers are embarking on an historic shift away from passenger cars in favor of more profitable SUVs and pickup trucks
- Out of the Ukraine, a 36-year-old man decided to steal some electronics. He got into a crate and had a friend ship him across the country. When finally inside the delivery truck, he started stealing from other boxes, iPhone Watches, Laptops, etc. He was smart, decided to reseal the boxes he took from with tape he brought. However, he never figured out what to do with himself! He couldn’t reseal himself back in. He was found once the driver stopped and got a 2 year prison sentence!
Commentary for the Week of April 2-6, 2018
Before President Trump’s decision to place tariffs on China, the Dow Jones Industrial average had closed higher 3 days in a row (something we haven’t seen for weeks!). The very next day the trade “not a war” was back in the headlines and the stock markets were all in the red, with the Dow falling 572 points that Friday.
Some investors are clearly spooked by the possibility that negotiations with China will be derailed by Trump. But there were other reasons for Friday’s slide too. The March jobs report came in well below expectations. Fed Chairman Jerome Powell spoke on Friday and praised the central bank’s “patient” approach to raising interest rates, which normally would make investors happy – but stocks still finished well into negative territory.
It’s hard to point to one reason for the market weakness, says Tim Bray of GuideStone Capital. Trump’s bluster is “part of a negotiation and a poor jobs report could plausibly be blamed on the weather.” Bray believes the market weakness is “more sentiment related, as market expectations have just been really high, a lot of earnings growth is baked into prices. If news isn’t really good, then stocks have been selling off. The market won’t put up with even a slight disappointment.” Unfortunately, Bray expects the glum mood to persist.