US-China Trade Deal Phase One...

7-7 Market Highlights (October 6 – October 12, 2019)

Trump boasts that the US has come to a substantial phase one trade deal with China and suspends tariffs scheduled to rise on Tuesday. DOW surged 500+ points at the news. Well, do you think Trump has the Chinese where he wants them…?  Regardless, Trump still wants FEDs to cut rates. The real impact will be revealed in the third-quarter earnings season that will kick off in earnest next week with the first reports expected Tuesday from big banks JPMorgan (JPM) Goldman Sachs (GS) and (C) along with fellow Dow components Johnson and Johnson (JNJ) and UnitedHealth Group (UNH). It will be a busy earnings season. But expectations for the season are subdued as continued trade tensions between the U.S. and China and a slowing global economy are already making themselves felt in economic data and economists are increasingly warning of a coming earning season…

Meanwhile, Iran claims that missiles hit oil tanker near Saudi Arabia and Hong Kong demonstration against mainland China and island leadership linger casting a dark shadow on the Communist Chinese leadership. And, Democratic zeal for impeaching Trump is picking up noises as evident by the whistleblowing proclivity of the maleficent and alarmist. And, life goes on…

Market closed on10/11/2019:    DOW: 26.817;   S&P500: 2,970;   NASDAQ: 7,843;      Gold: $1,491.90; Oil: $54.80;  US 10-Year: 1.731% 

Here are the highlights of the 41st week of 2019:   

1.     The US Suspends China Tariffs.             The U.S. says China tariffs scheduled to rise on Tuesday suspended; no decision on other tariffs. Treasury Secretary Steven Mnuchin said on Friday that tariffs slated to hit imports of Chinese goods next week will not go into effect. The announcement came as Trump said there is a “very substantial phase one deal” between the two superpowers after high-level talks this week. Friday’s announcement does not have any bearing on a separate tariff hike set to kick in on Dec. 15, or on tariffs put in place in September.  The U.S. had previously threatened to increase duties on $250 billion worth of Chinese goods from 25% to 30% on Tuesday. Tariffs put in place in September on a wide range of consumer items will remain in place. Those tariffs, of 15%, apply to about $112 billion worth of Chinese goods. The president and Mnuchin delivered the news from the Oval Office alongside Chinese Vice Premier Liu He, sending the major indexes to their session highs. Stocks pulled back after the president left open the possibility of future tariffs.

2.     Chinese NBA Partners Sever Ties.        Nearly all of the NBA’s Chinese partners have cut ties with the league. Eleven of NBA China’s local partners have suspended or ended their relationship with the league. Earlier this week, Tencent, Luckin Coffee and Vivo suspended their relationships with the NBA. The relationship between the NBA and China began eroding after Houston Rockets general manager Daryl Morey tweeted in support of the anti-government protests in Hong Kong. Out of the 25 official partners listed on the NBA China website, 13 are Chinese businesses. So far, 11 of those companies have distanced themselves from the league amid escalating tensions between China and the NBA. China is one of the NBA’s most important markets. The tweet was quickly deleted, and Morey apologized, but his comments drew backlash in China. The NBA’s commissioner, Adam Silver, apologized Tuesday for offending the league’s Chinese fans, but he stood by Morey’s right to express his opinions, saying the NBA would “protect its employees’ freedom of speech.”

3.     Turkey Invades Syria, Seizes Town.         Turkey Hits Towns and Villages with airstrikes during the 2nd day of Syria invasion. Turkish ground forces seized at least one village from Kurdish fighters in northern Syria as they pressed ahead with their assault for a second day. The Turkish invasion was launched three days after U.S. President Donald Trump opened the way by pulling American troops from their positions near the border alongside their Kurdish allies. The Syrian Kurdish militia was the U.S.’s only ally on the ground in the years-long campaign that brought down the Islamic State group in Syria. After ordering the pull-back, Trump warned Turkey to be moderate in its assault into northern Syria. But the opening barrage showed little sign of holding back. Well, the Turkish jets and artillery had struck 181 targets so far. Turkish President Erdogan claimed that so far 109 “terrorists” were killed in the offensive. Turkey considers its operations against the Kurdish militia in Syria a matter of its own survival, and it also insists it won’t tolerate the virtual self-rule that the Kurds succeeded in carving out in northern Syria along the border.

4.     Iran Says Oil Tanker Hit by Rockets Off Saudi Arabia.   Two missiles struck an Iranian tanker traveling through the Red Sea off the coast of Saudi Arabia on Friday, Iranian officials said, the latest incident in the region amid months of heightened tensions between Tehran and the U.S. There was no word from Saudi Arabia on the reported attack and Saudi officials did not immediately respond to requests for comment. Oil prices spiked by 2% on the news. "This latest incident, if confirmed to be an act of aggression, is highly likely to be part of the wider narrative of deteriorating relations between Saudi and the U.S. and Iran," private maritime security firm Dryad Maritime warned.   The reported attack comes after the U.S. has alleged that in past months Iran attacked oil tankers near the Strait of Hormuz, at the mouth of the Persian Gulf, something denied by Tehran. Friday's incident could push tensions between Iran and the U.S. even higher, more than a year after President Trump unilaterally withdrew America from the nuclear deal and imposed sanctions now crushing Iran's economy. And, Trump is also boasting that the Turkish economy could be devasted.

5.     US Dollar Good as Gold. The US dollar is cementing its role as a global safe haven. Good as gold? When it comes to having ns, the U.S. dollar might be better. That’s what some analysts said Friday as the dollar continued a rally versus major rivals, appearing to benefit from a desire for safe assets despite the fact that jitters are homegrown in the form of impeachment proceedings against President Donald Trump and a related whistleblower investigation.  “Since dollars have become more important to an increased number of people, it is not surprising that USD demand may increase with risk aversion,” she said. That helps to explain why the dollar gets a boost in times of rising uncertainty even when it is the U.S. that is causing the uncertainty.

6.     Whistle Blowing…       The term “whistleblower” is of uncertain origin, thought to refer to a police officer’s response when spotting a criminal, or to a sports referee calling out a foul… In the United States, the term “whistleblower” only came into wide use around 1975, cases such as the Pentagon Papers, which exposed White House deceit in the Vietnam War, the Watergate scandal that brought down President Richard Nixon, and the work of crusading of consumer advocate Ralph Nader. Many whistleblowers believe their own organization will fix whatever wrong they brought to light and are shocked and disillusioned when that doesn’t happen. And, a few may be disgruntled employees, many more are motivated by personal values but “Whistleblowing is really in America’s DNA.  But a decision to come forward with damaging information can carry enormous personal costs. Virtually every whistleblower, according to those who study the phenomenon, is forced to confront the ugly flip side of a heroic image: Stool pigeon. Tattletale. Snitch. Rat. Job loss and ruptured relationships are common consequences… Whistleblowing can end with ignominy, imprisonment or exile. The whistleblower at the center of the Trump impeachment inquiry, reportedly a CIA analyst temporarily assigned to the White House, probably had a better sense than most of what might lie ahead. Democrats are weaponizing whistleblowers for the impeachment inquiry in motion, according to many.

7.     Resume Falsification.      A recent report (GOBankingRates) finds that 5% of Americans admit they lied on their resumes. But most Americans think lying on resumes is fairly common. Though most people claimed to have never lied on their resumes, they believe that others do it. So, what They Lied About? They lied about: 1) Your work experience 38%, 2) Dates of employment 31%, 3) Your job title at your previous role 16%, 4) Your reference(s) 15%, 5) Your college education 11%, 6) Your responsibilities at your previous role 7%, 7) Your GPA 4%, and 8) Your internship experience 2%. Many of all age groups who admitted to falsifying information said they lied about work experience and dates of employment. However, for younger Gen X individuals ages 35 to 44 who have lied on their resumes, 38% said they weren’t truthful about their college education. Of the Americans who lied, more women admitted to lying about their dates of employment than men — 41% and 19%, respectively. More men admitted to lying about work experience than women, with 46% and 31%, respectively, altering their job history. After lying on their resumes at least once, 52% of women and 65% of men said they wouldn’t consider doing it again. Lying on your resume is dangerous for both you and your potential employer. It is a lose-lose situation. Pro Tip: Don't Lie.

These are my researches and analysis of the highlights of the week. Perhaps you should take a closer look at them, do additional research and analysis if these are interesting to you. This “7–7 Market Highlights” is presented for general knowledge, the resource for management, and perhaps as a tool for career development, and building wealth. As always, “Stay Curious” and “Think for Yourself”, you decide on your own terms. 

Mahalo. I welcome your thoughtful comments, “like” notes, and “share” of the publication. 

~ S. Vincent Shin

www.dhirubhai.net/in/vshin

Reference and Image credits to Bloomberg News, The Wall Street Journals, Getty image, AP Photo, Reuters, CNBC..., and special thanks to Image & Visual Consultant @U.Y.  All references, news, and images are from open source and public domain.