Written by Gary
US stock markets drops amid tech selloff, trade concerns (SPY -1.0% ouch). Tech-related stocks get clobbered after Fed lowers rate-cut hopes.
The Market in Perspective
| Here are the headlines moving the markets. | |
 | Disney poaches Netflix film-making chief for streaming service – DeadlineWalt Disney Co has hired the head of Netflix Inc’s original film division, Matt Brodlie, for its streaming service Disney+, according to a report by Deadline on Tuesday. |
| Wall Street drops amid tech selloff, trade concernsWall Street fell on Tuesday, led by a selloff in technology shares, as simmering trade concerns and disappointing economic data sent buyers to the sidelines, while Federal Reserve Chairman Jerome Powell pushed back on pressure from President Donald Trump to cut interest rates. |
| Bombardier exits commercial aviation with sale of regional jet business to MitsubishiBombardier Inc said on Tuesday it will sell its money-losing regional jet business to Japan’s Mitsubishi Heavy Industries Ltd (MHI) for $550 million in cash, in a deal marking the Canadian plane and train maker’s exit from commercial aviation. |
| Powell says Fed insulated from politics, wrestling with rate cutsFederal Reserve Chairman Jerome Powell on Tuesday said the U.S. central bank is “insulated from short-term political pressures,” and that its policymakers are wrestling with whether to cut interest rates as President Donald Trump has demanded. |
| Tesla likely to miss record second-quarter delivery target: ElectrekShares of Tesla Inc fell 1.3% on Tuesday after news website Electrek reported that the electric-car maker has so far delivered 49,000 vehicles in North America during the second quarter and may miss its quarterly target. |
| Gold soars to six-year high, stocks slide after Powell speechGold soared to an almost six-year high on Tuesday on escalating U.S.-Iran tensions, while equity markets slid on disappointing economic data and uncertainty that the Federal Reserve will cut interest rates in July as has been expected. |
| Oil prices mixed ahead of U.S. crude stock dataOil prices were mixed on Tuesday ahead of data expected to show U.S. crude stocks declining, outweighing investors’ concerns that U.S.-China trade tensions could dampen fuel demand. |
| AbbVie looks beyond Humira with $63 billion deal for Botox-maker AllerganDrugmaker AbbVie Inc said on Tuesday it would acquire Allergan Plc for about $63 billion, giving AbbVie control over the lucrative wrinkle treatment Botox and buying time to seek new growth before its blockbuster arthritis treatment Humira loses U.S. patent protection. |
| PG&E bondholders propose bankruptcy exit plan worth up to $30 blnA committee of bondholders of PG&E Corp’s utility unit on Tuesday proposed a bankruptcy reorganization plan that would inject up to $30 billion to help the California power provider emerge from Chapter 11 and pay off its liability from wildfires. |
| Bonds, Bitcoin, & Bullion Jump; Stocks Dump On Powell-Pullback, Trade-TalkA stunned equity market could not believe that Batman Powell and Doveboy Bullard dared to talk down the odds of a 50bps rate-cut in July… Ugly day in China overnight after Monday’s snoozefest… |
| US Set To Delay New China Tariffs… And Why This Is The Worst-Case Market ScenarioOver the weekend, when previewing the most likely outcome of the Trump-Xi talks, Goldman’s political analyst Alec Phillips said that “a commitment to re-engage seems the most likely outcome. US officials, including President Trump and US Trade Representative Lighthizer, have emphasized their interest in restarting talks.” As Phillips further noted, “in the two analogous face-to-face meetings that President Trump previously held with foreign leaders—with European Commission President Juncker in July 2018 and President Xi in December 2018—he agreed to postpone tariff increases in return for an unspecified commitment to negotiate an agreement. This seems to be the most likely outcome once again.” It appears that for once Goldman was right, because as Bloomberg reported moments ago, citing people familiar with the plan, “the U.S. is willing to suspend the next round of tariffs on an additional $300 billion of Chinese imports while Beijing and Washington prepare to resume trade negotiations.”
This tentative agreement was reached during a discussion of the broad outline of the Trump-Xi agenda in a Monday phone conversation between Robert Lighthizer, the U.S. trade representative, and his counterpart in Beijing, Vice Premier Liu He, which call was described by the American readout as “productive.” On the other hand, the probability of an actual breakthrough besides delaying new tariffs is virtually nil as “the U.S. won’t accept further conditions on tariffs as part of reopening negotiations and no detailed trade deal is expe … |
| The Fatal Conceit Of Central Planners Dies HardAuthored by Peter Schmidt via The92ers.com, There are two important points to remember when it comes to the financial crisis of 2008. The root cause of the financial crisis was a “purely human factor. This human factor is the completely false sense of omnipotence, self-importance and entitlement among the country’s elite, as well as the nurturing of these beliefs at Ivy League colleges and other elite universities.” Unless this purely human factor is addressed, “the US will be doomed to suffer other calamities every bit the equal of the financial crisis.” Recently, Lawrence Summers proved – beyond a shadow of a doubt – the veracity of these two conclusions. The Financial Times published an article profiling President Trump’s latest candidate for a position on the Federal Reserve, Judy Shelton. Among the most conspicuous differences between Shelton and her potential future Fed colleagues is she is completely dubious of the Fed’s ability to accurately set interest rates. In fact, she likens the entire notion of the Fed being as actively involved in the economy as it currently is, as being little different than Soviet-style central planning! A position I both wholeheartedly agree with and endorse! However, in response to the Financial Times article, Summers tweeted, “Judy Shelton does what I would have not thought possible. She falls well below Cain or Moore as a potential Federal Reserve governor. Hers would be a dangerous appointment.” |
| MSM Silent After Google Election Meddling Bombshell; Video Scrubbed From YouTubeIn an otherwise slow news-cycle, the mainstream media has somehow failed to report on an undercover exposé by Project Veritas in which a senior Google employee admits that the company is manipulating its algorithms ahead of the 2020 election in order to prevent the “next Trump situation.” |
| The reason why IndiGo founders turned against each otherThe reason why IndiGo founders turned against each otherRakesh Gangwal wants “higher standards” when the airline gets into related party transactions. |
| DHFL’s problems just refuse to go awayDHFL’s problems just refuse to go awayOut of the aggregate amount of Rs 375 crore, DHFL failed to make payments worth Rs 225 crore. |
| Grofers will soon come to a store near youGrofers will soon come to a store near youThis is Grofers’ second stint in brick-&-mortar format; in 2017, it opened tuck shops at Oyo properties. |
| America’s housing market is competitive, unequal, and often just getting by. Just like us.The annual report called The State of the Nation’s Housing shows an uncomfortable situation: not enough resources are going to help the least well-off obtain housing, helping exacerbate inequality in the housing market along both racial and socioeconomic lines. |
| Mom-and-pop landlords push investor share of home purchases to 19-year highThe share of homes bought by investors reached its greatest in two decades last year, led by small investors and concentrated east of the Mississippi. |
| Market Snapshot: Nasdaq records three-day losing streak after Powell emphasizes ‘wait-and-see’ stance on ratesU.S. stocks slump after Federal Reserve Chairman Jerome Powell said he wanted to avoid a knee-jerk reaction to any one data point |
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