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The Best of What They Said and I Read Week Ending 2/10/19

Short excerpts from articles I found interesting

I may not agree with the author and the following material is not intended as investment advice

Global Investors Investor Alert – February 8, 2019 – Frank Holmes

  • “…The major market indices finished up this week. The Dow Jones Industrial Average gained 0.17 percent. The S&P 500 Stock Index rose 0.05, while the Nasdaq Composite climbed 0.47 percent. The Russell 2000 small capitalization index gained 0.29 percent this week…The 10-year Treasury bond yield fell 5 basis points to 2.64 percent…Mattel was the best performing stock for the week, increasing 24.63 percent.”
  • “…UBS surveyed 500 CEOs and CFOs of American companies to see what things they are most worried about this year, reports Business Insider. The survey revealed that American business leaders are most worried about rising costs.  "I still think that global growth could be lower than people expect, mainly due to the sharp slowdown in global trade," said the world’s most accurate economic forecaster this week. Christophe Barraud, chief economist at Market Securities, had that to say when asked why the outlook for investors isn’t as rosy as it appears, reports Business Insider.”
  • “…It was a big week for clean energy developments. According to BNEF research, corporate purchasing of clean energy doubled in 2018. Globally, companies bought 13.4 gigawatts of clean energy last year, which is double the previous record of 6.1 gigawatts in 2017. Over 63 percent of the activity has occurred in the U.S. Congressional Democrats introduced the Green New Deal this week that aims to fight climate change and introduce drastic measures to cut carbon emissions across the U.S.  and drive new economic growth. Drax Group, a U.K. power plant, has begun capturing carbon dioxide at one of its power plants in a pilot project to cut emissions. According to Bloomberg, an Australian court blocked the development of a coal mine due to its potential to contribute to climate change.”
  • “…According to an article published in the New York Times, Russia has $472 billion in cash reserves, more than the country has combined in public and foreign debt ($453 billion) and nearly three times what the IMF recommends holding. The Russian government and companies have accumulated piles of money, because the law requires taxes from the export of oil to be saved when the price is above $40 per barrel. Russia is preparing to spend $100 billion on infrastructure projects and investing in roads, ports and hospitals.”

The Wall Street Journal – February 7, 2019 – To Beat Trump, Embrace Free Trade – Fred P. Hochberg

  • “…Voters need to be persuaded that Mr. Trump’s tariffs and trade policies are wrong and a guaranteed path to fewer jobs and opportunities.  It isn’t a hard story to tell.  U.S. soybean sales to China are down 94% since the president started his trade war, leaving many Midwest farmers praying for an end to hostilities before their beans rot.  Meanwhile, General Motors and Apple are only two of the U.S. companies that have recently cut jobs or revenue forecasts amid slowing sales to China.”
  • “Mr. Trump talks about trade as if it consisted mostly of other countries selling stuff and stealing jobs.  But it’s a two way street, and America sells more goods and services to more people than ever.  The U.S. exported $2.3 trillion of goods and services in 2017, supporting 10 million American jobs, including 271,000 in Michigan, 176,500 in Pennsylvania, and 111,000 in Wisconsin.  Workers in these states are churning out everything from tractors and tomography equipment to cars, trucks, medicines and vaccines.”  

Fortune – February, 2019 – How to deal With No Deal -  David Meyer

  • “The very possible scenario that the U.K. leaves the European Union without a negotiated exit deal would be a shock to everyone’s system.  With no trade deal in place, tariffs would jolt into effect, causing shortages on shelves and blockages in ports.”
  • “Many industries are stockpiling.  Though the British government has announced that medicine imports will get priority at the ports in the event of no deal, pharma giants such as AstraZeneca and Merck are caching meds, just to be sure.(AstraZeneca has also begun parallel testing at a Swedish site, owing to likely sudden changes in regulation.)”
  • “And in the auto industry, Aston Martin and Volkswagon-owned Bentley are not only stockpiling components to avoid manufacturing disruptions, they‘re also arranging to use ports other than Dover, the U.K.’s main ferry link with the European mainland, which is likely to become heavily congested…” 

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