Global Financial News Recap for July 25, 2019
US and China Rekindle Negotiations
Fire up the jet, US officials are heading to China to discuss the trade dispute at the end of July. Robert Lightizer, name like that he should be selling batteries but is actually the US trade representative and Steven Mnuchin, the treasury Secretary will be on this trip to Shanghai. Despite a truce set at the G20 summit, the US ban on Huawei phones and the Chinese not wanting to purchase agricultural goods caused doubts that this would go down. But it is! Asian markets reacted favorably on the news and perhaps this may be the sign that the 25% tariff on the $200 billion worth of may be reduced but there are threats to raise it to $300 billion which would cover all of the Chinese exports to the US.
Only the Brits want to go Gulfing
British attempts to gain support for a European naval mission to the Persian Gulf are proving ineffective. Germany says that it is too early and France won’t promise extra ships. Both seem as if they are trying to avoid being roped into this issue. The UK is saying that they need to protect their assets ie. tankers in the Persian Gulf. This comes after Iran took a tanker hostage and the UK took one of Iran’s. Hassan Rouhani, the president of Iran, said he “don’t want no smoke” or in layman’s terms: he doesn’t want conflict with Europe and said there wouldn’t be any issues if they followed international rules.
Boeing is Bloeing It
Boeing just suffered its largest quarterly loss, losing $2.9 billion. This was the result of their 737 Max Jet being grounded in the US due to mechanical issues and crashes that occurred in Africa. To ensure the safety of the plane, they’ve had to cut producing from 52 to 42 a month, although they plan to re-up this number, we can see why their revenues are suffering. Furthermore, their bottom line suffered due to a penalty they had to pay their airline customers due to the inconvenience. On a positive note, their defense and service segments bolstered sales and the stock only fell 2.7% given the news.
KPMG fined 5 million pounds
KPMG has been fined 5 million pounds pertaining to work that they did with BNY Mellon. The issue is that they signed off on Mellon reports that failed to protect consumers during the financial crisis. BNY Mellon is not off the hook either having paid 126 million in 2015 for orchestrating this situation. In terms of impact, KPMG’s reputation continues to suffer as they seem to be being fined the most out of the Big 4 accounting firms.
Migraines for Migrants?
Italians are passing a new law that will jail migrant vessels and impose fines of up to 1 million Euros. This law is being proposed by the interior minister Matteo Salvini who is part of the rightwing League party. The opposition believes that the refugee crisis is being manufactured to distract the Italian people from the real issues facing Italy. This may be the case since migrant arrivals have been decreasing since deals were made with Libya and Turkey to curb departures. Despite their being contention towards the bill, the majority of Italian people support stricter policies pertaining to immigration. Nevertheless, the UN has warned of the human rights ramifications that might occur from not aiding these migrants.
Ve Need More Money Vor Die Military
Germany’s defense minister has voiced a need for a larger military budget, wanting to raise the figure to 1.5% of GDP. Seems like chump change to the spending of nation such as the US. Her demands have been interpreted as an attempt to bolster her popularity as polls show her decline. Globally, she might be more revered as well. This is because other NATO nations think Germany spends too little and an increase could placate their discontentment. In order to achieve this increase, she will need approval from Olaf Scholz, Germany’s finance minister. Analysts believe this is unlikely as the two will run against one another in future elections.
In Other News:
Brexit might be coming to an end with Boris vowing to leave EU in 99 days. Facebook will be paying $5b billion to settle privacy breaches and Mueller doesn’t think Trump was cleared of obstruction. China is threatening to send their troops into Hong Kong, India is losing out on the US-China trade war, and Aston Martin just tanked 25%