Tech Review | Tech and Tax Reform: The New Paradigm in 2018

Tech Review (TR 2017-12-23)--Domain Mondo's weekly review of tech news with commentary, analysis and opinion: Features • 1) Tech and Tax Reform: The New Paradigm in 2018, 2) Novogratz Nixes Crypto Hedge Fund Plans, 3) Investing: The Week, Investing Notes, 4) ICYMI Tech News.

1) Tech and Tax Reform: The New Paradigm in 2018

Silicon Valley tech companies, employees, entrepreneurs, and investors, will realize tax cuts and other benefits beginning in 2018, under the new tax reform just passed by Congress, contrary to weeks of politicized misinformation published by much of mainstream media. A multitude of beneficial impacts from the tax bill will soon be reality:

"The U.S. tax overhaul is a boon to Silicon Valley technology companies like Apple Inc (NASDAQ: AAPL) and Alphabet Inc (NASDAQ: GOOGL), which will enjoy big tax cuts and the chance to bring back billions of dollars from overseas at a reduced rate. And contrary to the dire warnings of California officials, a large swath of Bay Area workers and their families stand to get a tax break as well, even with new limits on state and local tax deductions ...  many in Silicon Valley stand to benefit. Startup employees, freelancers and venture capital investors are among those who will get new tax benefits or keep those they already have, tax experts said."--Reuters.com Dec 21, 2017 (emphasis added).

Treasury's Sayegh Says Tax Bill a Big Win For U.S.

Bloomberg.com video above published Dec 22, 2017: U.S. Treasury Assistant Secretary for Public Affairs Tony Sayegh discusses the recently passed tax bill, concerns about the deficit and the Trump Administration's agenda for 2018. He speaks with Bloomberg's Kevin Cirilli on "Bloomberg Markets." President Trump signed the bill on Friday, Dec 22, 2017, watch the unfiltered video here.

The Information Technology Industry Council (ITI) said in a letter to members of Congress that the bill will benefit the technology industry. Washington-based ITI lobbies on behalf of major technology firms like Google, Amazon, Oracle and IBM.--Major tech trade association backs GOP tax bill | TheHill.com.

• Tax Reform Passed, Now What? “When the smartest guys say we’re ninth inning, we’re 7th inning, maybe 8th ... Late in the cycle, clever boys drown in dumb money ... And I can’t wait for this tax reform. I’m a trained economist you know, I know this stuff cold. It’s going to be like pouring gasoline on a fire,” he explained. “Trump promised us 5% GDP growth. Katie bar the door!”-- ZeroHedge.com. 
• Credit Suisse Chief US Equity Strategist, Jonathan Golub, has estimated that corporate tax cuts in the U.S. could boost average earnings of companies in the S&P by about 8-10%--ZeroHedge.com. 
• "It will help sustain a very strong year of earnings growth for U.S. and for global equities,” said Timothy Graf, State Street Bank & Trust head of macro strategy EMEA., speaking on Bloomberg TV. “It will keep sentiment robust”--Global Stocks Rise To Record Highs As Tax Reform Is "Priced In" All Over The World | ZeroHedge.com.

• Tax Cut Could Impact U.S. Economy Sooner Than Later | YouTube.com (Bloomberg video): Bloomberg Intelligence Chief U.S. Economist Carl Riccadonna examines the economic impact of U.S. tax cuts.

The Tech Stocks to Keep an Eye on in 2018

Bloomberg.com video above published Dec 15, 2017: Techonomy CEO David Kirkpatrick and Bloomberg's Cory Johnson discuss the outlook for tech stocks in 2018 with Bloomberg's Emily Chang on "Bloomberg Technology."

2) Novogratz Nixes Crypto Hedge Fund Plans

Bloomberg.com video published Dec 22, 2017: Michael Novogratz, the former Goldman Sachs Group Inc. and Fortress Investment Group LLC macro trader, is putting aside his plan for a cryptocurrency hedge fund and predicts that Bitcoin will plunge to $8,000. Bloomberg's Erik Schatzker reports on "Bloomberg Markets."

See also:

• Bitcoin plunges below $11,000 in volatile trading on Coinbase | CNBC.com

• A Strategy for When to Sell Bitcoin | Bloomberg.com: "Maximizing gains is fine, but minimizing regrets counts for a lot too."
• Why you can’t cash out pt 1: Why Bitcoin’s “price” is largely fictional | Attack of the 50 Foot Blockchain | davidgerard.co.uk.

• Bitcoin warnings grow more strident as Singapore urges 'extreme caution' | reuters.com

3) Investing

The Week: investors "cashing out their losers" before the close of the year next week, dropped markets slightly on Friday, but for the week, the Dow, S&P 500 and NASDAQ all posted their fifth straight weekly gain. "Large-cap US index on track to deliver returns, including dividends, every month of the year."--S&P 500 set to break record with ‘perfect’ calendar year | FT.com.

2018 Forecasts are being rewritten after passage of the tax reform bill: Jonathan Golub of Credit Suisse Group AG now predicts that the S&P 500 index (Friday: 2,683.34) will end next year at 3,000, up from his previous target of 2,875.

Investing Notes

• Dow rises 5,000 points in a year for the first time ever | cnbc.com Dec 18, 2017: "This is the biggest annual-points gain for the Dow in its history. A 140-point rally Monday sent it to an all-time high and pushed it to the 5,000-point milestone. "It's getting a bit extended, but I think it has more room to run," says MKM Partners' Jonathan Krinsky." Black Unemployment Rate Lowest in 17 Years | cnsnews.com.

• MacroView: In the U.S, the economy grew at its fastest pace in three years during the third quarter this year, while the economy of the eurozone is on pace for its largest expansion in a decade. In October, the International Monetary Fund raised its outlook for global economic growth to a rate of 3.7 percent in 2018, helping to push emerging market stocks up to six-year highs. Economic optimism soaring, boosting Trump's Approval Rating: CNBC.com survey.

• President Donald Trump's chief economist Gary Cohn is staying in the Trump administration, contrary to media reports, after successfully steering a tax reform package through Congress. "It's a once in a lifetime opportunity," Cohn said during an Axios.com event in Washington.

• A Look Back: Goldman Sachs: 2017 In 100 Charts | ZeroHedge.com.

4) ICYMI Tech News:

• A Reuters/Ipsos poll of 2,644 adults, released December 20, 2017, shows 60 percent of online shoppers in the U.S. planned to do most of their holiday buying on Amazon.com, up from 50 percent for the same period in 2015, while the number of shoppers who said they expected to do most of their holiday shopping at Walmart.com, Target.com and Macys.com declined by about 1 percent.
• Xiaomi's 2017 profit to exceed $1B based on company's $17B-$18B revenue estimate; $2B profit expected in 2018, makes $100B IPO value “reasonable”--reuters.com
• Snap Inc. $SNAP To End 2017 With No Profit In Sight: "Unless SNAP focuses on cutting costs, it will not see positive profit for years to come. Furthermore, Snap's R&D investments, like Spectacles, may not ever yield positive results or revenue"--SeekingAlpha.com.
• Ultimate Snub: Google brings Chrome to the Windows Store as just a download link--TheVerge.com--but Microsoft quickly removed it--here's the "must have."
• BuzzFeed CEO Jonah Peretti criticizes Google and Facebook in newsroom memo, says media is in crisis--"The media is in crisis. Google and Facebook are taking the vast majority of ad revenue, and paying content creators far too little for the value they deliver to users."--buzzfeed.com
• How far ahead is Google Maps over Apple Maps? Google has a 6+ year lead over Apple, with Google Maps' data of buildings and “Areas of Interest” from its aerial, satellite, and Street View imagery--justinobeirne.com.

From the Reuters feed:

• France files complaint against Amazon for abuse of dominant position | reuters.com

• U.S. says Facebook, Microsoft disabled North Korean cyber threats | reuters.com

• Facebook defends itself against critics of social media | reuters.com

• UPS reserves 125 Tesla semi-trucks, largest public pre-order yet | reuters.com

• Google launching artificial intelligence research center in China | reuters.com

• Uber dealt blow after EU court classifies it as transport service | reuters.com

-- John Poole, Editor, Domain Mondo  

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MacroView | Market Outlook for 2017: Trump Effect, Optimism, Risks

2017: Year of the Charging Bull?

Domain Mondo's weekly review of  macro economic and investing news:

MacroView Feature •  Market Outlook for 2017, Trump Effect, Optimism, Risks To Watch For in 2017:

•  Re-Energized U.S. Dollar Looms Over the Rest of the World | WSJ.com: "On Wall Street, the rising dollar has been one of the most visible signals of growing optimism in the U.S. economy ... Expectations of fiscal stimulus under President-elect Donald Trump “have absolutely re-energized the dollar,” said Alan Ruskin, head of G10 foreign exchange strategy at Deutsche Bank. “This is a major shift in policy dynamics” ... Roughly 60% of clients surveyed by Citigroup believe the dollar will be either “moderately higher” or “sharply higher” against developed and emerging market currencies next year."

•  Dow Jones Industrial Average (DJIA):

The Trump Effect has so far generated confidence and optimism in the markets and economy but will it continue in 2017? Despite the efforts of the Obama administration to kill the post-election Trump Rally by having Secretary of State John Kerry openly condemn Israel, abstaining on the UN vote against Israel, and engaging in dubious geo-political retribution--"Obama Strikes Back at Russia for Election Hacking" | NYTimes.com--the Dow Jones Industrial Average still managed to close for the year on Dec. 30, 2016, up 7.8% since Trump's election on Nov. 8, 2016 (see chart above).

Fortunately for U.S. and global markets, Putin is looking ahead "to cultivate relations with Trump" and has decided Russia will not retaliate, for now, against U.S. acts of provocation in these final, apparently dysfunctional, last days of the Obama administration:

• White House fails to make case that Russian hackers tampered with election | ArsTechnica.com
• FBI/DHS Joint Analysis Report: A Fatally Flawed Effort | Medium.com: "If the White House had unclassified evidence that tied officials in the Russian government to the DNC attack, they would have presented it by now. The fact that they didn’t means either that the evidence doesn’t exist or that it is classified. If it’s classified, an independent commission should review it because this entire assignment of blame against the Russian government is looking more and more like a domestic political operation run by the White House that relied heavily on questionable intelligence generated by a for-profit cybersecurity firm with a vested interest in selling “attribution-as-a-service”." (emphasis added)
• Something About This Russia Story Stinks | RollingStone.com
• Exit Obama in a Cloud of Disillusion, Delusion and Deceit | CraigMurray.org: "... He [Obama] now goes out of power with absolutely no grace and in a storm of delusion and deceit. His purpose is apparently to weaken Trump politically, but to achieve that at the expense of heightening tensions with Russia to Cold War levels, is shameful. The very pettiness of Obama’s ... minor sanctions and expelling some diplomatic families – itself shows that Obama is lying about the pretext. If he really believed that Russia had “hacked the election”, surely that would require a much less feeble response. By refusing to retaliate, Russia has shown the kind of polish that eludes Obama as he takes his empty charisma and presentational skills into a no doubt lucrative future in the private sector."--Craig Murray, former UK Ambassador (emphasis added).

•  2017 Risks: 2017 Elections in France (April-June) and Germany (August-October): The West Should Hope That Merkel Loses | ForeignPolicy.com.

Could Marine Le Pen be elected the next President of France?:

Could Marine Le Pen be elected the next President of France? Populist movements are on the rise all over Europe—one reason why the French presidential election in 2017 may be a nail-biter. Video above published December 28, 2016 by Economist.com.

•  China: The rising U.S. dollar has exacerbated capital outflows and tightening liquidity in China. Chinese stocks and bond markets have fallen since Trump's election, and Chinese regulators have injected money to allay a possible credit squeeze. China’s central bank had already drained $300 billion of its reserves in the first three quarters of 2016, more than it spent in all of 2015, in an attempt to slow the Chinese yuan’s decline against the U.S. dollar. According to WSJ.com, China’s currency is down 4.3% against the dollar since October, falling to a record low.

No trade wars, but watch a new trading book with China | cnbc.com: "Washington's intent to correct its huge trade imbalance with China is not coming as a surprise to Beijing. The Zhongnanhai mandarins know that their trade surpluses with the U.S. -- $366 billion in 2015 and $289 billion in the first ten months of this year -- are difficult issues that must be addressed. That is the substance of the problem. The rest is rhetoric."

Chinese media praise Trump's 'experience and ideology' | Yahoo.com (Nov. 15, 2016): "Chinese state-run media lauded Donald Trump Tuesday after a phone call between him and President Xi Jinping, saying that the president-elect's emergence could mark a "reshaping" of Sino-American relations. The pair spoke Monday, when Xi said that the two powers needed to co-operate and Trump's office said the leaders "established a clear sense of mutual respect for one another" ... Monday's conversation was "diplomatically impeccable and has bolstered optimism over bilateral relations in the next four years", China's frequently nationalistic Global Times newspaper said in an editorial."

Power grab at China’s National Congress in October 2017?

In China, the Communist Party’s 19th National Congress in October 2017 determines who will rule the world’s rising superpower for the next five years. Amid bitter political infighting, the changes will be sweeping. Video above published Dec 27, 2016, by Economist.com.

•  India Fears Run on Banks: Capital Controls and Withdrawal Limits to Continue | MishTalk.com.

•  From Russia with Love: "Mr. Putin’s popularity really is very high [in Russia]: around 70 percent. During the 2015-16 recession, G.D.P. fell by more than 4 percent and real incomes declined by 10 percent. That is significant, but much less serious than, say, the 40 percent drop in G.D.P. that Russia experienced during the first half of the 1990s. Despite a dramatic decline in oil prices and the burden of sanctions imposed by Western governments after the Crimea crisis, the Putin administration has managed to avert economic disaster by pursuing competent macroeconomic policies."--NYTimes.com

•  Good Question: How Well Will Trump Get Along With His Own Cabinet? | MishTalk.com. But maybe Trump really likes having a diversity of opinions unlike Dem-libs who talk of 'diversity' but only tolerate 'conformity' in opinions:

Joe Scarborough on 2016 Election Results a 'Complete Earthquake' | Morning Joe | MSNBC.com Nov 9, 2016: "... talk about elephant in the room (media) here ... everything that we've all talked about they [the media] could have seen it coming, but the media was all in on this narrative [Clinton will win, Trump has no path to 270 electoral votes] and it was just everybody [in media] was marching in lockstep 'Clinton's going to win, Clinton's going to win.' Early voting came out and I was doing one of those little '270 to win' maps. I immediately looked at early voting and I moved North Carolina and Florida to Trump. You would have thought I hung a Nazi flag in front of my house and everybody was talking about Florida is 'in the bag' (for Clinton) and I kept looking at the numbers and I kept thinking I know this state [Florida], I know north Florida, but every single analyst said there was no way Trump was going to win Florida ... (Mika interjecting: 'Trump has no path to 270 electoral votes we were told repeatedly.')"

For the record, Trump won 306 electoral votes, Clinton only 232. So much for the old legacy media's propaganda, fake news, and failed attempt to suppress Trump voter turnout by incessantly publishing their false narrative: "Trump has no path to 270 electoral votes."

•  The Top Two of the 16 Top Tech Policy Developments of 2016 | Andreessen Horowitz | a16z.com are political: "#1 Trump wins ... #2 Brexit ..."

•  2016's Biggest Losers: 1. Old Legacy Media (i.e., New York Times, Washington Post, ABC, CBS, NBC, CNN, et al); 2. Dem-Lib Elites (mainly in Washington, D.C., New York and California); 3. Bill & Hillary Clinton; 4. Democratic Party; 5. Obama; see The whole Democratic Party is now a smoking pile of rubble | Vox.com: "The down-ballot party has withered, and Obama’s policy legacy will be largely repealed," and  The Case Against the Media, by the Media | NYMag.com: "... it’s not just Trump; dire signs for media were everywhere this year."

•  One More Thing: People are now using the term “fake news” to refer to discredited reports from mainstream media (MSM), and the New York Times is surprised? LOL! See: Fake News: TheGuardian.com Caught Deceptively Editing Quotes from Julian Assange Interview | Breitbart.com and Something About This Russia Story Stinks | RollingStone.com: "... it's OK [now] to publish an allegation when you yourself are not confident in what your source is saying is a major departure from what was previously thought to be the norm in a paper like the [Washington] Post."

The Guardian’s Summary of Julian Assange’s Interview Went Viral and Was Completely False | TheIntercept.com: "This article is about how those false claims — fabrications, really — were spread all over the internet by journalists, causing hundreds of thousands of people (if not millions) to consume false news. The purpose of this article is to underscore, yet again, that those who most flamboyantly denounce Fake News, and want Facebook and other tech giants to suppress content in the name of combating it, are often the most aggressive and self-serving perpetrators of it."--Glenn Greenwald

-- John Poole, Editor, Domain Mondo 

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Dow Heading for 20,000, Stocks Rise, Gold Falls Ahead of Fed Rate Hike

Blue-chip index nears milestone as tech joins the Trump rally--Traders assign 100% odds to a Fed rate hike on Wednesday:

DJIA 3-month chart (source: google.com)

S&P500 Index (source: google.com)

Fed Interest Rate Hike Bad News For China? At the Federal Reserve Open Market Committee (FOMC) meeting on Wednesday, an interest rate hike of 0.25% is expected. This rate hike will be only the second increase by the Federal Reserve in 10 years (the first increase took place December 2015). This may have ramifications on emerging markets in general and China in particular which faces an economic slowdown. A U.S. interest rate increase will likely increase capital outflows and generate additional growth headwinds for China. 

Headlines Tuesday leading up to the expected Fed Rate Hike:

Dow Heads for 20,000 as Stocks Rise, Gold Falls: "Global stocks advanced, sending the Dow Jones Industrial Average within 50 points of 20,000 on speculation that the Federal Reserve’s expected rate increase is a signal of confidence that the economy is strengthening. The dollar and Treasuries were little changed. IBM Corp. and Intel Corp. led gains in the blue-chip index as it heads for a fresh record and the round-number milestone ... Its relative-strength index stood at the highest level in two decades ..."--Bloomberg.com

IBM Lays Out Plans to Hire 25,000 in U.S. Ahead of Trump Meeting: "IBM Chief Executive Officer Ginni Rometty said she plans to hire about 25,000 people in the U.S. and invest $1 billion over the next four years, laying out her vision for filling technology jobs in America on the eve of a meeting of industry leaders with President-elect Donald Trump. Rometty, who is on Trump’s advisory panel of business leaders, will join Facebook Inc.’s Sheryl Sandberg, Amazon.com Inc.’s Jeff Bezos and Alphabet Inc.’s Larry Page and Eric Schmidt at a summit with Trump Wednesday in New York that is said to focus on jobs."--Bloomberg.com

Small Business Owners' Optimism Skyrockets Following Trump Victory: "The November reading of the National Federation of Independent Businesses' small business optimism index jumped to 98.4 from 94.9 — its sharpest surge since 2009 — with all of the increase in sentiment coming after the U.S. elections held on Nov. 8."--Bloomberg.com

After talking with Trump, Bill Gates likens president-elect to JFK: "... in the same way President Kennedy talked about the space mission and got the country behind that, I think whether it's education or stopping epidemics ... [or] in this energy space, there can be a very upbeat message that [Trump's] administration [is] going to organize things, get rid of regulatory barriers, and have American leadership through innovation ... Of course, my whole career has been along those lines. And he was interested in listening to that. And I'm sure there will be further conversation."--Microsoft co-founder Bill Gates after recently speaking with Trump--CNBC.com.

"Allegations of Hacking Election Are Baseless" Say High-Level American Intelligence Officials: "The various ways in which usually anonymous spokespeople for U.S. intelligence agencies are equivocating – saying things like “our best guess” or “our opinion” or “our estimate” etc. – shows that the emails alleged to have been “hacked” cannot be traced across the network. Given NSA’s extensive trace capability, we conclude that DNC and HRC servers alleged to have been hacked were, in fact, not hacked."--WashingtonsBlog.com

Obama Says No Evidence that Russia Tampered with Votes in Election: During an interview with the Daily Show’s Trevor Noah, Obama downplayed the hack of a private email account of Clinton campaign chief John Podesta. "We were frankly more concerned in the run up to the election to the possibilities of vote tampering, which we did not see evidence of, and we’re confident that we can guard against ... None of this should be a big surprise,” Obama said, “Russia trying to influence our elections dates back to the Soviet Union.” Obama dismissed the hack and the leaked emails as “not very interesting” and lacking “explosive” revelations. He puzzled as to why it was an “obsession” by the news media despite the knowledge that the Russians were responsible.--Breitbart.com.

Trump's selection of  Tillerson lifts hope of US rapprochement in Moscow: "Sergei Karaganov, one of Russia's most senior foreign policy hands, says the difference is that Tillerson is a hard-nosed pragmatist who [as Secretary of State] will focus on getting things done, and leave aside the many political and philosophical issues where Russia and the US will never agree. Like many in Moscow's upper circles, Mr. Karaganov has met Tillerson and says that his ratification would be a signal that genuine and lasting detente between the two powers is a real possibility."--CSMonitor.com

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US Recession Risk: Slow Growth Economy, Small Business Optimism Low

Evercore CEO: We're 'Close to the End of the Line' for Monetary Stimulus:

Evercore CEO: We've Got A Slow Growth Economy That Is Vulnerable - Ralph Schlosstein, chief executive officer at Evercore Partners, evercore.com, discusses the restrictions of monetary policy and the need for a move to fiscal policy. He speaks on "Bloomberg ‹GO›", published by Bloomberg.com May 4, 2016.

Video below: Survey Reports Small Business Optimism Hits 3-Year Low

Despite a strengthening employment picture nationwide, a new Bank of America survey indicates less than a quarter of small business owners plan to hire new employees in 2016 amid pessimism about economic growth. Bank of America's Sue Lonergan and small business owner Sal Rizzo join Lunch Break with Tanya Rivero to discuss. Published by WSJ.com on May 4, 2016

Video below: World markets continue to behave as though there is a risk of a US recession

America's profits recession | Authers' Note: John Authers looks at profits and revenues data to try to explain why. Published by FT.com on May 4, 2016.


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