Thanksgiving is a time to eat delicious foods, spend quality time with family, and share thoughts on what we all are thankful for, but it’s also a time to reflect on terrible ideas for tech startups. For example, last year, while sitting at the dinner table, I looked down on the floor to find that one of my dogs was begging for a piece of turkey. One thing led to another and I became obsessed with what breeds existed within the DNA of my mutt of a dog. Then, it hit me, “23 & me,” but for pets. Low and behold, I looked it up on the internet and discovered that someone had already thought of that and started a successful company. Maybe I’ll come up with something even better this year.
Here’s what you missed in the news yesterday…
You Had To Make It Political
Every year, on Thanksgiving, the President of the United States will typically hold a group call with US service members stationed around the world to thank them for their services, especially given that many of them would rather be home celebrating with their families. This year, President Donald Trump had a rather pointed political tone on the call and, according to CNN, he spoke on very controversial topics, rather than simply wishing the troops well and signing off.
“This was sad, predictable and avoidable. The President’s conduct on that call, the manner in which he politicized it, demonstrated an utter and complete disregard for what military service means.”
-Rear Adm. John Kirby
Trump continued on his politically charged tangent throughout the call, and addressed, several times, the “issue” of the Honduran migrant caravans.
“Large numbers of people are forming at our border and I don’t even have to ask you, I know what youw ant to do, you want to make sure that you know who we’re letting in. And we’re not letting in anybody essentially because we want to be very, very careful.”
–President Donald Trump
You, Sir, You Are Definitely Fired
Remember how we talked, last week, about Carlos Ghosn, the chairman of Nissan Motor Co (NSANF), and how he was arrested for financial misconduct? Well, according to CNBC news, in an hour-long meeting held on Thursday, hopefully with turkey and mashed potatoes on the table, Nissan’s (NSANF) board of directors voted unanimously to fire Ghosn as chairman.
According to Nissan’s (NSANF) official statement following their board meeting:
“After reviewing a detailed report of the internal investigation, the board voted to unanimously discharge Carlos Ghosn as Chairman of the Board and Representative Director, as well as study the creation of a special committee to appropriately maintain better governance of director compensation and create a better governance management system.”
–Nissan Motor Co Board of Directors Statement
Hillary, Where’ve You Been, Girl?
Former US Secretary of State, and two-time Democratic presidential nominee, Hillary Clinton has advice for European leaders and on Thursday, she made her thoughts publicly clear.
“I think Europe needs to get a handle on migration because that is what lit the flame. I admire the very generous and compassionate approaches that were taken by leaders like Angela Merkel, but I think it is fair to say Europe has done its part, and must send a very clear message — ‘we are not going to be able to continue to provide refuge and support’…”
–Former Secretary of State Hillary Rodham Clinton
Clinton is, of course, referring to the refugee crisis in Syria and other nations around the world which has seen countries like Greece, Italy, and Germany succumb to the effects of the influx of immigrants.
Fed Announces No Rate Cuts, But Sees A Cut In The Future
For the past couple of years, the United States Federal Reserve has been in the middle of a lot of speculation. The trade war between the United States and China has created a clamor for cuts in interest rates.
But on Wednesday, the Fed held the interest rates as they were. Furthermore, the Fed officially announced that no cuts in interest rates were forthcoming in 2019. It’s interesting to note that the markets are betting heavily on a forthcoming rate cut from the Fed. Some even expect the cuts to be formalized in July.
Rate Cut Ahead?
The Fed has ruled out the possibility of any cuts this year (allegedly). But many market watchers believe that a lot depends on how the market conditions evolve over the coming months. The uncertainty regarding the trade war with China is a major problem.
Yet experts believe that if it turns into a prolonged skirmish, then the Fed might reconsider its position. The United States President Donald Trump has led been campaigning for lower rates from the Fed for some time.
After having delivered his statement on Wednesday, the Chairman of the Federal Reserve Jerome Powell seemed to imply that rate cuts could not be completely out of the question in 2019.
“Many participants now see the case for a somewhat more accommodative policy has strengthened.”
The decision by the Fed was possibly one of the most-watched events in recent times. Long-term ramifications are the main concern.
Market participants had been calling for multiple cuts. But the Fed voted to keep benchmark rates within the 2.25% and 2.5% range. It was the range that had been back in December when the Fed had controversially raised the interest rates. The voted had been passed 9-1 in favor of holding the rate.
Trade Talks Fail, What’s Next For The Market?
The trade war between the United States and China has probably been the biggest economic and diplomatic development since the turn of the year. Although the world’s two biggest economies were locked in talks for months over a new trade deal, it all unraveled quickly.
This happened when US President Donald Trump stated that the Chinese went back on their word. He then imposed tariff hikes on Chinese goods last Friday. The tariffs were raised to an astonishing 25% on goods worth $200 billion. Although Trump might believe this might bully the Chinese into submission, many experts believe that might not be the case.
Difficulty in Completing Deal
The President had imposed these tariff hikes right before the Chinese delegation was supposed to show up at Washington. This was for which many had believed was going to be the last round of talks. However, experts now feel that the escalation of tensions between the two countries following the latest developments will make it difficult to reach a deal that could be considered a win for the US. As soon as the tariffs kicked in, Beijing announced that it was looking at countermeasures as well. However, there were no specifics on the nature of these measures.
Last year, the two nations had been embroiled in a damaging retaliatory tariff war and it could lead to a protracted trade war, if the Chinese decided to resort of the same tactics. The Chinese delegation is going to be in Washington this week to engage in another round of talks but it is believed that a binding trade deal is unlikely to be signed.
Is A Trump Win Likely?
One of the biggest reasons why the deal might not be signed anytime soon is perhaps the fact that the US President needs to be able to claim it as a win for himself. The President has staked his personal weight behind a favorable deal for the US. But with every passing day, it is looking increasingly unlikely that it is going to happen.
If that is to happen, then China’s entire way of doing business will need to change. This is starting at intellectual property theft and expands to technology transfers by force from US companies. If those things are not part of the deal, then it would not be the sort of deal that can be claimed as a win for the US. It doesn’t help that today, China came in with its own tariffs. China will raise tariffs on $60 billion in U.S. goods, the Chinese Finance Ministry said Monday.
And in true Trump fashion, the U.S. may not be done retaliating. The U.S. President has threatened to put 25% tariffs on $325 billion in Chinese goods that remain untaxed. The president has signaled he is content leaving the duties in place, arguing they will damage China more than the U.S. What are your thoughts?
Can 102 Words Really Impact Stock Prices?
In short, the answer is yes. We’ve witnessed, first hand, this week how just a few words can drastically impact the stock market. If you’re just tuning in, at the beginning of the first full week of May, U.S. President Donald Trump Tweeted out a 102-word post that ended up triggering a sell-off costing the global markets around $1.36 TRILLION…with a “T”!
The “Trump Tweet” expressed that he would once again increase tariffs on Chinese goods by the end of this week. What followed has been a shock to the global markets with futures pointing at dramatic declines every day this week. Though some say that the decline are all but a speed bump, it still hasn’t helped the fact that this drop is one of the worst seen all year. People like Kerry Craig of JPMorgan Asset Management think that a trade deal can still be reached. The expectations, however, have been readjusted to reflect a more long-term time horizon.
Eyes Turn Toward The Second Half Of The Week
Other analysts like Oanda Asia Pacific’s Jeffrey Halley feel that investors are prudently “lightening their loads.” Halley said, “My feeling is that investors are lightening their portfolios as a precaution.”
“Liu will be in the U.S. from May 9-10. The invite comes from both the U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin.” Regardless of what “will happen,” what has happened thus far has been an emotionally charged & very fragile global market. As this story develops we will continue to follow with more updates.
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