Written by Gary
US equity futures are modestly lower (SPY -0.5%). Investors await Fed Chair Powell’s speech from J Hole at 10:00 a.m. ET.
Here is the current market situation from CNN Money | |
European markets are mixed. The FTSE 100 is higher by 0.12%, while the DAX is leading the CAC 40 lower. They are down 0.50% and 0.38% respectively. |
What Is Moving the Markets
Here are the headlines moving the markets. | |
China unveils retaliatory tariffs on U.S. goods in deepening trade rowChina unveiled on Friday retaliatory tariffs against about $75 billion worth of U.S. goods, marking the latest escalation of a protracted trade dispute between the world’s two largest economies. | |
British judge orders confiscation of $1 million in cryptocurrencies from jailed hackerA London judge ordered on Friday the confiscation of bitcoin and other digital currencies worth nearly $1 million from a prolific computer hacker, in the first case of its kind for Britain’s biggest police force. | |
Volkswagen recalls 679,000 U.S. vehicles that could roll awayVolkswagen AG said Friday it is recalling 679,000 U.S. vehicles sold since 2011 that could roll away because of an electrical issue. | |
Stock futures turn sharply lower after China threatens tariffs on U.S. goodsU.S. stocks futures fell sharply on Friday after China said it would impose tariffs on about $75 billion worth of U.S. goods. | |
SoftBank-backed Oyo, known for budget stays, to rebrand Hooters hotel in VegasSoftBank Group Corp-backed Indian hospitality startup Oyo will rebrand Hooters Casino Hotel in Las Vegas in a deal that a source with knowledge of the matter said was worth $135 million. | |
Thyssenkrupp, Kloeckner in talks over co-operation in materials trading: sourcesThyssenkrupp is in talks with Kloeckner & Co over future cooperation in materials trading, but is not working on a near-term takeover of the metals firm, three people familiar with the matter said. | |
Stocks, dollar inch up ahead of Powell’s Jackson Hole speechWorld stock markets and the dollar rose on Friday as investors looked to a speech by Federal Reserve chair Jerome Powell for clarification on whether the U.S. central bank remains on course to deliver another interest rate cut in next month. | |
U.S. fines Deutsche Bank $16 million to settle China, Russia corruption chargesDeutsche Bank has agreed to pay more than $16 million to settle charges that it violated U.S. corruption laws by hiring relatives of foreign government officials in order to win or retain business, the U.S. regulator said in a statement. | |
Shares in Peppa Pig owner rise past Hasbro offerPeppa Pig-owner Entertainment One’s shares rose more than 30% to a record high on Friday, surpassing the price agreed by the company’s board with U.S. toy maker Hasbro Inc in a sign that investors see some chance of a counter offer. | |
Dead Meat In Jackson HoleAuthored by MN Gordon via EconomicPrism.com, If there are any virtues of debt instruments with negative yields we’ve yet to realize them. Certainly, we understand that as bond yields fall, bond prices rise, and bond investors are rewarded with capital appreciation. But when capital’s appreciating as a consequence of negative yields, we suspect there’s something fundamentally wrong with the capital itself. Capital markets, as we’ve always understood them, are centered around lenders buying debt – such as a bond – at a yield that compensates for the risk of default over a contracted duration. The acceptance of negative yield is an abstraction that violates the form and function that capital markets are built on. In fact, negative interest rates undermine the foundational business model of banking in general. How can banks loan money if they’re not compensated for the risk that some loans will go bad? And if banks can only loan money at a loss, why loan money at all? If there’s no profit motive, what’s the point? There’s currently about $17 trillion in combined government and corporate negative yielding debt in existence. The European Central Bank and the Bank of Japan, with policies of mass money debasement that far exceed those of the Federal Reserve, are the primary culprits. Their fake money and fake interest rates have produced fake capital markets. In effect, Negative Interest Rate Policy (NIRP) destroys a commercial banks ability to build capital and offset losses. In other words, NIRP destroys commercial banks. By extension, NIRP via central banks leads to the implied nationalization of commercial banks. Japan and Europe are already past the point of no return. President Trump beats on Fed Chair Jay Powell practically every day to go negative. | |
Futures Plunge After China Announces Retaliatory Tariffs On Another $75BN In US GoodsJust over an hour after the Global Times’ Hu Xijing warned that China would announce retaliatory tariffs on certain US products, adding that “China has ammunition to fight back”, that’s precisely what happened when China’s Ministry of Finance said in statement posted on website late Friday that it would levy retaliatory tariffs on another $75BN in US goods with rates anywhere between 5 and 10%, with the tariffs set to be implemented in two batches, one at midnight on Sept 1 and another at midnight on Dec 15. Additionally, China said it would resume 25% tariffs on US autos, stating that “China’s adoption of tariff-adding measures is a forced move to deal with US unilateralism and trade protectionism.” Which is somewhat ironic, because of a time-zone difference quirk, it will in fact be China who will impose tariffs on the US first at midnight Beijing time, 12 hours before the US imposes its own tariffs on China. The full Google-translated statement from the Ministry of Finance is below:
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Beijing Enraged After US Navy Ship Sails Through Taiwan StraitWith the 70th anniversary of the founding of the CPC looming, and Beijing staking out a more aggressive trade stance Friday morning by threatening retaliatory tariffs, the US picked the best – or worst – time to provoke Beijing, when a Navy ship sailed through the Taiwan Strait in the Navy’s latest “freedom of navigation” operation, or ‘freeop’ on Friday. As CNA points out, Washington has actually increased its antagonistic operations in the Taiwan Strait as tensions with Beijing have soared this year, and Friday’s mission risks stoking tensions even further, as Beijing has warned international powers not to interfere in its relationship with Taiwan, or risk provoking Beijing’s wrath. | |
Global Markets On Edge Ahead Of Powell Speech, 2s10s Dips In And Out Of InversionGlobal stocks, US equity futures, and the dollar rose on Friday ahead of a much anticipated speech by Jerome Powell which the market hopes will provide clarity on whether the Fed will deliver another interest rate cut in three weeks, and whether it will be 25 or 50bps. | |
Government withdraws super rich tax on foreign investorsGovernment withdraws super rich tax on foreign investorsA dedicated cell will also be set up at the CBDT to address the tax problems of startups. | |
Government withdraws super rich tax on foreign investorsGovernment withdraws super rich tax on foreign investorsOver the last few weeks, FM has chaired a series of meeting with industry leaders, bank representatives. | |
Inside India’s messy e-vehicle revolutionInside India’s messy e-vehicle revolutionIndia’s embrace of e-vehicles has been disorganized, with hordes of e-rickshaws leading the charge. | |
Rail Week Ending 17 August 2019: Intuitive Sectors Remain In ContractionWritten by Steven Hansen Week 33 of 2019 shows same week total rail traffic (from same week one year ago) contracted according to the Association of American Railroads (AAR) traffic data. The economically intuitive sectors rolling averages remain in contraction – and was unchanged this week.. | |
Need to Know: Investors are so bearish, it’s almost time to start buying stocks again, says Bank of AmericaHappy Jackson Hole-Friday. Our call of the day comes from the Bank of America folks, whose Friday “Flow Show” zeroes in on a contrarian signal telling investors to get ready to love stocks again. | |
The Fed: Fed’s Bullard backs more interest rate cutsSt. Louis Fed President James Bullard on Friday said the central bank should continue cutting interest rates. | |
The Wall Street Journal: Sen. Tom Cotton says buying Greenland was his idea firstSen. Tom Cotton of Arkansas proposed the idea to the Danish ambassador to the U.S. in August 2018, in a meeting in the senator’s office that had been arranged to discuss the North Atlantic Treaty Organization and the Nord Stream 2 gas pipeline, according to a spokeswoman for Cotton. |
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