Global Financial News Recap for Aug 2, 2019
Trade war escalates with China
The US financial markets have taken a dive after Donald Trump announced a 10% Tariff on an additional $300 billion of Chinese goods. This is in addition to the 25% on the $250 billion and includes all goods now.
China Double down on Hong Kong
The Chinese military recently released a video of them handling protestors to curb protests. This video alludes to the idea that the Chinese military might move in take action. Thus far they have urged the Hong Kong police to take action and punish these “criminals”. The protests have been going on for 2 months and the Chinese are pointing blame at Americans and other foreigners for starting this movement. Nevertheless, tensions rage on pertaining to the Chinese extradition law.
Shelling out too much in Expenses.
The Royal Dutch Shell corporation recently saw their earnings fall 26% after a tumultuous quarter. The company points blame at lower energy prices as well as a fall in earnings for gas, refinement, and chemicals. Historically, the chemicals business is the one to be most affected by macroeconomic slowdown or trade wars. The news lead the stock price to come down 5%. BP beat their earnings while Total and Eni did not. Exxon and Chevron are set to report this week.
Brazilian Politics
Brazil is facing a pension crisis, their pension spending is set to take 17% of GDP in the next 40 years. A social overhaul is necessary and Brazi'l’s president- Bolsonaro is on board. The man leading the effort is Rodrigo Maia. Maia comes from a family of politicians and is being commended for his own efforts. He has been praised for his ability to unite a divided parliament, pass bills quickly, and address pertinent issues.
Fed Up
Lack of detail from Jay Powell, the Fed chairman, has caused frustrations and a negative market response. The cut of 25 basis points was foreseen but the lack of guidance was not. Investors are confused and wondering whether or not there will be more cuts.
In other News
UK will leave EU in October, Refinitiv deal continues to boost LSE, and Ebola is wreaking havoc in the Congo. The bank of England sees a 1 in 3 chance of the UK economy shrinking post Brexit, trade tensions are causing problems for Asian Manufacturers, the coal industry in the US is struggling, and Russian bonds might be a good idea.