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Mnuchin RSVPs “No,” Dow Drops Low

Daniel Chase

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I imagine the conversation went like this…

INT. Oval Office, President Trump, Treasury Secretary Steven Mnuchin, and Secretary of State Mike Pompeo enter the room, wearing matching “MAGA” hats

Mnuchin: (delivering the punchline of a joke) And the bartender goes, “cookie, my favorite!”

Trump and Pompeo: Haha! Good one, Steven. 

Trump: That joke was excellent. The best joke in the world. China doesn’t tell jokes. 

Pompeo: Good one, Mr. President. Now, Steven, joking aside, we wanted to tell you something.

Mnuchin: Sure, I’m listening. Hold on, let me take these out of my ears (Mnuchin comically removes two coins from his ears)

Pompeo: Not now, Steven, this is important. Now, I’m sure you’ve heard the news about Jamal Khashoggi, the journalist from Saudi Arabia?

Mnuchin: Yes, I’m headed to an investor conference in Riyadh tomorrow.

Trump: You’re not going. Too dangerous 

Pompeo: We can’t risk it during this controversy 

Mnuchin: But, Mike! (groans like a teenager)

Sources can’t confirm that the above took place as described, but Treasury Secretary Mnuchin did announce Thursday that he was rescinding his participation in a “high-profile investor conference” in Saudi Arabia, likely because of the growing controversy over journalist Jamal Khashoggi’s murder. 

Mnuchin tweeted on Thursday: 

An administration official told CNN that no other government officials will attend next week’s summit in Mnuchin’s place. 

In response to the Treasury Secretary’s refraining from the conference, the recently jittery stock market took a turn down south. CNN reports that the Dow lost as many as 392 points, or 1.5%, on Thursday, as investors reacted to Mnuchin’s decision. 

Tech stocks followed suit, with Facebook (FB) and Alphabet () losing about 2% each, the Nasdaq falling 1.5%, and Netflix (NFLX) tumbling about 3%. 

Market volatility is in the air and residents of Wall Street are ready to cut their losses. Increasing fears of rising bond yields coupled with President Trump’s trade war with China sparked an onslaught of buyer’s remorse last week, the worst for all three major indexes since March, according to market analysts. 

Many believe Mnuchin’s announcement was based on rising tensions between the United States and Saudi Arabia over the situation surrounding missing Washington Post Journalist, Jamal Khashoggi. 

Khashoggi visited the Saudi consulate in Istanbul several weeks ago to file paperwork in order to marry his Turkish fiancee. The journalist, who in recent months began critiquing the Saudi government, never returned to his Turkish wife-to-be. An audio clip, released by the Turkish government confirms that Khashoggi was drugged, killed, and dismembered while in the Consulate. 

Sources reportedly told CNN that a group of Saudi men, whom Turkish officials believe are in cahoots with those who planned Khashoggi’s killing, were led by a high-ranking intelligence officer, with one source saying “he was close to the inner circle of the kingdom’s Crown Prince Mohammed bin Salman.”

Treasury Secretary Mnuchin was not the only government official in the geopolitical space to withdraw from participating in the event held in Saudi Arabia. UK Trade Minister Liam Fox elected not to attend as well.

“The Secretary of State for International Trade has decided the time is not right for him to attend the Future Investment Initiative in Riyadh on October 23…The UK remains very concerned about Jamal Khashoggi’s disappearance. We encourage Turkish-Saudi collaboration and look forward to the Kingdom of Saudi Arabia conducting a thorough, credible, transparent, and prompt investigation. ” 

Unnamed UK government spokesman on behalf of Dr. Fox

Several other government officials canceled their plans, including French finance minister Bruno Le Maire and Dutch Finance Minister Woke Hoekstra. 

In addition to the various nations’ “no-thank-you” RSVPs, the boycott of the country has spread to entrepreneurs in Silicon Valley. Uber CEO Dara Khosrowshai and other industry executives including C-level friends from Ford (F), Google (GOOG), and several others have decided against making appearances at Saudi Arabia’s annual “Davos in the Desert” event this month. 

Only time will tell as to whether the effects of the Saudi governments alleged involvement with Khashoggi will result in the pulling back of investments from Silicon Valley, as well as from the many nations who declined to send officials. Recent reports indicate that Richard Branson, founder, and chairman of Virgin Galactic, has temporarily suspended his $1 billion partnership with Saudi Arabia. 

Will other companies follow suit?

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Walmart (WMT) Stock Price Jumps On Latest Earnings Beat

Jon Phillip

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BENTONVILLE, Ark.–(BUSINESS WIRE)–Walmart Inc. (NYSE: WMT):

  • Total revenue was $130.4 billion, an increase of $2.3 billion, or 1.8%. Excluding currency, total revenue was $131.7 billion, an increase of $3.7 billion, or 2.9%.
  • Walmart U.S. comp sales increased on a two-year stacked basis by 7.3%, which is the strongest growth in more than 10 years. Segment operating income increased 4%, marking the fifth consecutive quarter of growth.
  • Walmart U.S. eCommerce sales growth of 37% includes strong growth in online grocery.
  • Sam’s Club comp sales increased 1.2%, and eCommerce sales grew 35%. Reduced tobacco sales negatively affected comp sales by 300 basis points.
  • Net sales at Walmart International were $29.1 billion, a decrease of 1.1%. Excluding currency, net sales were $30.4 billion, an increase of 3.3%. Strength in Walmex and China were offset by softness in the U.K. and Canada.
  • Operating income declined 2.9%, or 2.4% in constant currency, which was better than planned with strong results in the U.S. businesses. As expected, the inclusion of Flipkart this quarter negatively affected profit results.
  • Adjusted EPS excludes an unrealized loss, net of tax, of $0.01 on the company’s equity investment in JD.com for the second quarter of FY20.
  • FY20 adjusted EPS is now expected to range between a slight decrease and a slight increase compared with FY19 adjusted EPS.
  • Walmart U.S. surpassed 1,100 grocery delivery locations and has more than 2,700 pickup locations.
  • The company’s NextDay delivery service from Walmart.com now covers about 75% of the U.S. population.

About Walmart

Walmart Inc. (NYSE: WMT) helps people around the world save money and live better – anytime and anywhere – in retail stores, online, and through their mobile devices. Each week, over 275 million customers and members visit our more than 11,300 stores under 58 banners in 27 countries and eCommerce websites. With fiscal year 2019 revenue of $514.4 billion, Walmart employs over 2.2 million associates worldwide. Walmart continues to be a leader in sustainability, corporate philanthropy and employment opportunity.

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Facebook (FB)’s LIBRA Sees Warning Bells Even Before Launch

Jon Phillip

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Libra – which is the name of Facebook (FB)’s upcoming cryptocurrency- has already managed to cause quite a stir among bankers and politicians across the world. Along with the present difficulties with the regulations and the consequences it would bring, the currency is now also dealing with opposition and cautions from international communities. Needless to say that this move has also boosted tech stocks related to cryptocurrency as well

Policymakers Worldwide Speak Against The Crypto-Currency

France was one of the many countries to resist making Libra a sovereign currency. Bruno Le Maire, the Finance Minister of the nation protested vehemently against Libra, claiming that the idea of a private company becoming a state doesn’t sit well. The country further is levying a new tax on the technology giants like Amazon pay, Google, etc which has caused some controversy. Even Jerome Powell, the Chairman of Federal Reserve disputed against the cryptocurrency being anxious about privacy and consumer protection.

Mark Carney, the Governor of Bank of England, also spoke against Libra claiming that it could either succeed or fail, but it would have no scope for improvement and development once it is launched. If successful, it would definitely prove to be a great asset; however, there can be no guarantee that it would be rock solid from the very beginning without which it is bound to fail. These types of scope around currencies demand strict and definite vigorous regulations to be set. The hurdles seem to be big enough to delay the launch of Libra into the market- which has been scheduled for next year.

Tech Giants Ban Together For Crypto?

Uber, Mastercard, Visa, and Facebook came together as an association to oversee the launch of Libra. This is a cryptocurrency different from bitcoin which is aimed to have a stable value without any volatility. It would help the World Bank-claimed 1.7 billion adults to have access to financial institutions and banking services. At the same time, it could help Facebook make big money through its app wallet -Calibra.

Facebook’s executive David Marcus maintained that the company knows of the risks that Libra might pose if proved unsuccessful. Therefore the company requested the help of bankers, lawmakers, and regulators so as to do away with issues of money laundering, terrorist financing, etc.

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Citigroup (C) Set To Supercharge Its Investment Banking

Joe Samuel

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With a vision to bolster its investment banking, Citigroup (C – Stock Info) is poaching a number of senior dealmakers from its rival banks. In order to secure a spot among the top three investment banks globally ranked by revenue, the company slew senior officials from many banks viz Deutsche Bank, Goldman, and Barclays PLC.

The company has seen some major movements in the past one year – right from the coming together of its corporate lending and mergers-and-acquisitions advisory business with its unit that helps clients raise debt and equity to hire senior officials recently. The bank combined its corporate and investment bank with its capital markets business to streamline its product offerings to clients.

It gave a promise of allowing bankers to cross-sell lending, underwriting, advisory, and other related services to clients together. It is partly designed to be a key selling point for attracting new investment bankers. With these constant efforts, the company clearly looks to supercharge its investment banking business.

Hiring Senior Officials From Rival Banks

The New York-based bank hired three executives away from Deutsche Bank including 13-year veteran Mark Keene, who will become global co-head of technology, and three executives from Goldman Sachs. This includes Elizabeth Milonopoulos who will co-head the bank’s internet investment banking unit with Brian Yick. He joins the bank from Barclays. The hiring of Deutsche Bank AG’s Mark Keene is among the major asset of the company as it is the highest profile among the new hires.

citi bank stock C stock

Knee co-headed the German lender’s global technology, media and telecom team in San Francisco. He is proficient in the semiconductor sector and will be in charge of the technology investment banking globally. Knee will do this together with the bank’s Herb Yeh. It’s anticipated that Knee enhances business with his expertise in the semiconductor sector as the industry is gradually consolidating. Earlier this month, German chip maker Infineon Technologies AG struck a $9.4 billion deal to acquire the U.S.’s Cypress Semiconductor Corp.

The Citigroup has stood on the 5th rank in the past two years of the global investment bank. However, the foundation of the bank seems strong outside America. It ranked among the top three in Europe, Middle East, and Africa. The list of hires also include tech bankers Elizabeth Milonopoulos from Goldman Sachs and Brian Yick from Barclays.

They will act as global co-heads of internet investment banking. Doretta Mistras joins from Goldman in the health care sector. His work includes advising on the $32 billion deal between Shire PLC and Baxalta Inc. Others in the list are Michael Marcus from Goldman and Mark Hantho and John Eydenberg from Deutsche Bank.

According to Manolo Falco, co-head of Citigroup’s Banking, Capital Markets, and Advisory unit, “If we get the right talent, we have a big opportunity.”

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