UPDATE Trump & Xi meeting--US-China Trade Talks Resume--Trump says he will allow sales of US equipment to Huawei where there are no national security issues, for now; US will not impose new tariffs on China, for now:
President Trump Press Conference, June 29, 2019, Osaka, Japan.
Trump and Xi's G-20 meeting is 'very, very critical'
Ric Deverell, Chief Economist and Global Head of Macro Strategy at Macquarie in Sydney, Australia, says, depending on what happens at the G-20 meeting between Trump and Xi, there could be a "double dip" or a sharp pick up in global growth. CNBC International TV video above published Jun 21, 2019. Macquarie Group Limited (domain: macquarie.com) is an Australian multinational independent investment bank and financial services company.
Stanley Druckenmiller: Macroeconomic Analysis of the Market, Trade and Investing
Interview and Q&A on June 3, 2019, at the Economic Club of New York, with billionaire investor Stanley Druckenmiller, Chairman & CEO, Duquesne Family Office LLC. Topics covered include current macroeconomic factors and the impact of changes in interest rates, the US-China trade war, and more. Transcript (auto-generated, unedited)(pdf).
We’re getting ready for tonight’s evening program with iconic investor Stanley Druckenmiller, who some have called the greatest hedge fund manager of his time. Join the conversation using #ECNYDruck or tune in to Facebook for the live broadcast at 6pm EDT. pic.twitter.com/w10adNVz0Y
“It’s very clear to me that you need a hurdle rate for investment and that if you don’t have a hurdle rate for investment, bad things happen.” #ECNYDruck
On his economic ideology: “When I got in the business it became clear to me that macroeconomic statistics of precocity the economy, they’re really great at telling where you are and where you’ve been. The best economic predictor is the inside of the stock market.” #ECNYDruck
Tech Review (TR 2019-06-15)--Domain Mondo's weekly review of tech investing news: Features • 1)Entrepreneurs' Top Tips for Startups Raising Money, 2)Google and Facebook vs. Journalism & Democracy,3)Investing: The Week & Investor Notes: Why Trump Will Win The Trade Wars,4)ICYMI Tech News:Huawei, AT&T, Verizon, Amazon, Apple, Microsoft, Salesforce,and more. 1)Entrepreneurs' Top Tips for Startups Raising Money
Top entrepreneurs offer advice on how to raise money and spend it wisely. Financial Times (ft.com) video above published Jun 7, 2019.
2) Google and Facebook vs. Journalism & Democracy
Facebook and Google control 60% of the online ad market, and why that's bad for journalism and democracy, according to this CNN Business video published Jun 7, 2019.
3)Investing
The Week: NASDAQ Composite+0.7% | S&P 500 Index+0.5% | DJIA+0.4%*The major indexes are still showing strong gains for June — the Dow is up 5.1% and the S&P 500 is up 4.9%.
• Editor's note: Why Trump Will Win The Trade Wars: US exports make up only 12% of theUS economy, of which nearly a thirdgo to Canada and Mexico, with which Trump has already made trade deals (USMCA). In addition, many of the most valuable US exports are 'must-have' items such as Qualcomm chips. In short, Trump is playing with a much stronger hand (and he knows it), than China or Germany, the world's two largest exporters, both ofwhich are heavy net exporters to the U.S., and upon which their economies are more dependent.Trump doesn't need to bluff, 'everyone in the game' knows he is holding the better hand (unless they are delusional or in a state of denial). China may still be trying to adjust to the culture shock of Trump's 'negotiating style' but the 'cold hard truth' is China’s Likely to Lose a Tech Cold War--bloomberg.com. Germany, the world's second largest exporter, and dominant member of the EU, is actually a more complicated situation than China, with Brexit still an "uncertainty"--see UK Parliament Rejects Move To Block No-Deal Brexit--but if I were advising Germany, I would be worried. Germany will likely have to adjust to a new level playing field with the U.S. in trade, something long overdue, and which Germany has never had to face in the post-World War II era (now going on for almost seventy-five years), during which the U.S. generated big trade deficits with Germany as one way to stabilize and strengthen Europe to counter the Soviet Union. See Germany Struggles to Figure Out How to Get Trump to Back Off--bloomberg.com.
"If President Trump has a poker style it is almost certainly loose aggressive. It is the most challenging style to play well and the most difficult to play against. It is very hard to read a loose aggressive player, to know what they might do next. Such players are constantly taking the initiative, dominating the game. They are predictable only in their unpredictability. Sometimes they go down in flames but usually it is the loose aggressive players that win the money. Loose aggressive stands against tight weak. President Carter would probably play tight weak as would [UK Prime Minister] Mrs. May, although it is hard to imagine either at a poker table."--Arthur Goodhart
• U.S. Mobility:38 percent of US respondents say they are mobile with the resources, ability, and inclination to make a move. In fact, 5 percent of respondents say there is a 100 percent chance of their moving. The mobile are most likely to live in cities, though the income and educational background of "the mobile" and "the rooted" are similar.
EU:Foreign investment into Europe falls for first time in 7 years--CNBC International video interview of Andy Baldwin, EMEIA managing partner at EY, discusses the management consultancy's 2019 European Attractiveness report: "appetite to invest in Europe" has dropped to a seven-year low.
• European banks? "They are burdened with an overbanked market, aging systems, a lack of resources to digitise and re-invent their services, and there are still no signs of any European banks emerging as cross border champions. European banking union is another EU initiative that seems to have drowned in the sea of bureaucracy that sinks everything. Governments still see their duty as protecting national banking champions. There is repeated regulatory failure; Danske Bank in terms of money laundering and the collapse of Spanish and Italian banks doesn’t help. No European banks are expanding, building market share. Instead they are all, and have been, retrenching. If I could think of something positive to say about Europe ... But I really can’t"--Bill BlainJun 4, 2019.
China: the International Monetary Fund expects Chinese growth to slow to 6.2% this year and to 6% in 2020, the weakest since 1990, but many analysts believe real growth has already dipped below those levels, confirming a grim outlook for the world economy. See also The Countries with the Most MonstrousCorporate Debt Pileups.
Hong Kong: after seven hours of marching, organizers estimated 1,030,000 people took part in the protest opposing the proposed China extradition law.
January 2019: the US Justice Department unseals Huawei indictments including 23 counts (here and here) pertaining to the alleged theft of intellectual property, obstruction of justice, and fraud related to its alleged evasion of US sanctions against Iran.
June 2019: 'Dead Man Walking' Huawei,applies to trademark its “Hongmeng” operating system (OS) in at least nine countries and Europe, deploying a back-up plan in key markets as U.S. sanctions threaten its business model. However, China's industry insiders are less optimistic that Chinese chip makers can quickly meet the challenge of supplying all the needs of Huawei and other domestic technology firms. Prospectuses of Chinese chip companies preparing to list on a new tech-focused stock exchange in China are even more blunt, characterizing China's domestic chip industry as “relatively backward,” lacking in talent, and requiring “a long time to catch up.” See also:
Huawei indefinitely postpones the announcement of a new Windows laptop, originally scheduled for June, 2019, due to ongoing US trade sanctions.
Google Is Moving More Hardware Production Out of China--Trump’s tariffs push tech giant to boost Taiwan manufacturing, while companies, both foreign and domestic, increasingly seek to pivot production away from China due to U.S. President Donald Trump’s efforts to reset the parameters for global trade and manufacturing. Foxconn says it can assemble Apple iPhonesoutside China.
AT&T: Dish Network Corp is open to merging its satellite television business with AT&T Inc.’s pay TV service, DirecTV, since both Dish and DirecTV are hemorrhaging subscribers as viewers continue to shift to cheaper online streaming services such as Netflix Inc and Amazon.com Inc.’s Prime video service. Unfortunately, AT&T's problems don't end there as AT&T appears to have no viable plan for its WarnerMedia streaming service a year after the Time Warner merger closed. Verizon:7 Reasons To Turn Bearish--upcoming Wi-Fi 6 and Wi-Fi 7 technology may disrupt the wireless mobile industry by making free or low-cost city-wide Wi-Fi a reality.
Amazon is Betting Big On Satellite Internet. See also: Amazon is offering flight booking on its platform in India, and it wants to build a one-stop app to offer customers a wide range of services which will attract users to Amazon Pay in the crowded digital wallet industry.
Why Sell Microsoft--new tax law ramifications .. cloud computing has no moat ... Windows 10 has continuing quality and performance issues [Editor's note: most people would be better off to forget about Win10 and just get a Chromebook] ... Microsoft behind in artificial intelligence (AI).
Instagram, a fashionista favorite, helped unknown labels find an audience but now "big bucks are changing the game" as cash rich luxury goods groups such as LVMH and Kering use increased social media budgets to drown out rivals on platforms once seen as a leveler for brands big and small.
IPO: Pet care company Chewy Inc. (NYSE: CHWY) (domain: chewy.com), closed up 59% at $34.99 after its debut IPO on the New York Stock Exchange, Friday, June 14.
A Bad Use of Technology:"Illegal robocalls are not just a drain on individual households' peace of mind, they are also a drain on our economy," FCC Chief Economist Babette Boliek and Chief Technology Officer Eric Burger wrote in a blog post, before the FCC voted unanimously to let carriers block robocalls by default.
Personal Tech: Google’s Login Chief Would Rather You Use Apple’s Sign-In Button Than Keep Using Passwords--‘I honestly do think this technology will be better for the internet.’
CNBC Television video above published Jun 5, 2019: discussion on antitrust and U.S. tech companies with CNBC's Josh Lipton and Joe Kernen, and the Fast Money traders, Pete Najarian, Tim Seymour, Karen Finerman and Guy Adami, and Antitrust Lawyer Gary Reback, Carr & Ferrell, on the government's antitrust case against Google.
Google, Amazon, Facebook and Apple, worth nearly $3 trillion combined, reportedly under federal investigation.
Google Should Be Afraid. Very Afraid--a new round of antitrust questions can’t go well for the company. The culture has turned against tech since Google skated free in 2013--bloomberg.com.
Google has few political allies and a history of complaints, so an antitrust case may move quickly, say experts.
The House Judiciary Committee is launching a bipartisan investigation into whether large tech companies such as Facebook, Google and Amazon are using their vast market power to suppress competition.
A possible Apple probe is reportedly linked to the Google probe, and stems from meetings between the DOJ and the FTC.
Despite investor concerns about #tradewars causing a slowdown in the economy, the Fed’s latest #BeigeBook yesterday showed it has yet to dent growth materially. Fed Funds Futures still don’t care… odds here continue to forecast three rate cuts by the end of this year. $SPY$IVV
China: Chinese Bank With $105 BN In Assets On Verge Of Collapse. China’s stock market hit by the biggest outflow of foreign capital on record in April and May as trade war with the US and worry about the stability of the RMB weighed on investors, reported the Financial Times. China services PMI Plunges As Output Expectations Hit 7 Year Lows--zerohedge.com. Also: Pentagon report slams China for “eroding the values and principles of the rules-based order”--bloomberg.com.
Amazon said it would open pop-up shops in the UK to give more than 100 small online businesses an opportunity to sell on the 'high street' for the first time. “Clicks and Mortar” stores will sell homeware, health and beauty, food and drink, and electronics.
Food-Delivery Rivals DoorDash, Grubhub, Uber Eats and PostmatesRisk Capital Destruction--a problem in the 'valuations.'
Boeing 737 Max: fatal flaws can be traced to a breakdown late in the plane’s development, when test pilots, engineers andregulatorswere left in the dark about a change that would ultimately play a role in two crashes--NYTimes.com.
Tech Review (TR 2019-05-25)--Domain Mondo's weekly review of tech investing news: Features • 1)The Future of Facial Recognition AI Software, 2) How Amazon Is Fighting Rakuten For E-Commerce In Japan,3)Investing: The Week & Investor Notes: Chinarunning out of runway,4)ICYMI Tech News: Twitter, Amazon, Google, IBM, Red Hat, Huawei, Facebook, T-Mobile, Spacelink, and more.
1)The Future of Facial Recognition AI Software
San Francisco is the first American city to ban facial recognition software used by police and other agencies. Bloomberg QuickTake explains why the technology's advance is so alarming to regulators, the public, and even the people developing it. Bloomberg.com video above published May 16, 2019.
2) How Amazon Is Fighting Rakuten For E-Commerce In Japan
Amazon is involved in around half of all e-commerce transactions in the United States, but in Japan it faces competition from Rakuten(rakuten.com). The Japanese e-commerce giant has a loyalty program and a suite of products including its own credit card, online bank and streaming services. In recent years, Amazon’s superior logistics capabilities and focus on price have allowed the company to capture greater market share. This video shows how the two e-commerce giants are borrowing the most successful parts of each other’s models as they look to the future. CNBC.com video above published Apr 30, 2019.
Investor Notes: China running out of runway in U.S. Trade War. China is running out of options to hit back at the United States without hurting its own interests, as Washington intensifies pressure on Beijing to correct trade imbalances in a challenge to China’s state-led economic model. Even Lloyd Blankfein is now a Trade Warrior.
Trade war can seriously derail China economic development, according to Mohamed El-Erian--China could slip into a middle income trap if trade war persists, but by ending the trade war, El-Erian believes China could regain its economic momentum--scmp.com. Why an economic war with the US blows China up--zerohedge.com.
"The US is willing to take a short-term hit in the form of higher consumer prices, and welcome inflation, from Chinese imports until global supply chains re-adjust and new domestic and international lines open, knowing the long-term damage is limited. Meanwhile, the hit to China is long-term and directly on production, thus right across the economy right at the most difficult phase of economic transition. Chinese economists are talking about a 1-2% hit to GDP. I suspect much more plus increased domestic social and political tension. Xi is in more trouble than we think."--Bill Blain
Eurozone banking at risk of dangerous fragmentation, ECB warns. Euro hits 20, but will it make 30?--dw.com. French Incomes Are Below America's Poorest States... And The Protesters in France Know It.
Brexit: Watch the European election results, particularly from the UK, to be released late Sunday May 26. See also: Why Freedom From Brussels' Tyranny Is Worth A Small Loss Of British GDP, and UK Prime Minister Theresa May resigns after having failed to deliver Brexit. Conservative Party successor in place by late July, without need for a general election, is likely to be Boris Johnson who has indicated that leaving the EU without a deal ("no deal Brexit") is a possibility.
Beware M&A:
Occidental's Big Mistake: Overpaying For Resources In An Age Of Energy Abundance--seekingalpha.com.
Bayer's Acquisition Of Monsanto May Have Sown The Seeds Of Bayer's Own Destruction--seekingalpha.com.
4)ICYMI Tech News:
How Twitter Became Ubiquitous in Japan--a look at Twitter in Japan, its second-largest market, raking in $136M in Q1 revenue, where the service has mass appeal and many users have multiple accounts--bloomberg.com.
E-commerce sales in the U.S., over the past five years have doubled. On a seasonally adjusted basis, e-commerce sales in Q1 2019 hit an all-time high of $137.7 billion. "E-commerce sales" include sales by the online operations of brick-and-mortar retailers Walmart, Home Depot, BestBuy, and Macy’s, which operate the fourth through seventh largest e-commerce websites in the U.S., behind Amazon, eBay, and Apple.--wolfstreet.com.
Out of 50 of the largest companies in the U.S., the highest median employee pay in 2018 was at Texas-based oil giants not Silicon Valley tech giants.--bizjournals.com.
Google has had a huge run, and with financial and potential political challenges looming, now looks like a good time to sell $GOOG, $GOOGL--SeekingAlpha.com.
IBM and Red Hat after IBM's acquisition of Red Hat is complete later this year--zdnet.com.
By 2023, Uber Eats may own 25% of the global food delivery industry worth $191B, but both DoorDash and GrubHub make more sales, and DoorDash is growing fastest--fortune.com.
Huawei: Wi-Fi Alliance, semiconductor standards body JEDEC, and SD Association suspend Huawei's membership, which will limit Huawei's future ability to shape these standards. U.S. Tech Companies Begin to Cut Off Huawei. Experts are skeptical of Huawei's claims that it can ensure a steady components supply without U.S. tech, saying Huawei will struggle to replace chips, lasers, other parts. For example, Huawei relies on chip design software from the American global "gold standard" market leaders Cadence Design Systems Inc. (NASDAQ: CDNS), and Synopsys Inc. (NASDAQ: SNPS), used by manufacturers worldwide. Note also: Google reportedly suspended business with Huawei that requires the transfer of hardware and software products except those covered by open source licenses.
China's tech transfer problem is growing, says EU business group. European firms are reportedly increasingly required to transfer technology in China in order to gain access to the Chinese market.
Facebook has apparently formed a new financial tech firm, Libra Networks LLC, according to a filing on the Geneva Commercial Register.
Google Chrome browser pushes "SameSite" cookie security overhaul--an IETF standard called SameSite (RFC6265bis)--which Google and Mozilla have promoted since 2016 and Google has announced it will start pushing more aggressively in Chrome from version 76 this July--nakedsecurity.sophos.com.
SpaceX launches first satellites for Musk's Starlink internet service (domain: starlink.com). Competitors include Airbus SE-backed OneWeb which launched satellites in February, LeoSat Enterprises (domain: leosat.com), and Canada’s Telesat (domain: telesat.com).
"... we will have eliminated about 7,000 salaried positions or about 10% of our global salaried
workforce. This includes both voluntary and involuntary separations over the past year. Within that
total, and consistent with our goal to reduce bureaucracy, we will have reduced management structure
by close to 20%. This will result in annual savings of about $600 million ..."
Personal tech:
10 best cheap phones: for summer travel, leave your $1,000 iPhone or Galaxy at home. Editor's note: my 'short list'--LG K30 – 16 GB – Unlocked (AT&T/T-Mobile/Verizon) ($139.99) orUnihertz Jelly Pro The Smallest 4G Smartphone in The World, Android 7.0 Nougat Unlocked Smart Phone with 2GB RAM and 16GB ROM ($124.99). Almost everyone could use a second "backup phone" / "emergency phone" / "vacation phone" anyway.
Personal security: hacker steals $1 million using just a phone number--bitcoinist.com.
Tech Review (TR 2019-05-18)--Domain Mondo's weekly review of tech investing news: Feature • 1)What the Uber IPO Says About Investors State of Mind, 2)Investing: The Week& Investor Notes: Macroview | EU Elections,3)ICYMI Tech News: Apple & Antitrust, Amazon, Facebook, Google, Microsoft, Oracle, China, and more. 1)What the Uber IPO Says About Investors State of Mind
Financial Times (ft.com) U.S. managing editor Peter Spiegel and markets reporter Nicole Bullock discuss why Uber's stock traded below the $45 IPO price at the New York Stock Exchange on Friday, May 10, 2019. Video above published May 11, 2019.
Morgan Stanley ClientsSaddled With Massive Losses After Disastrous Uber IPO.
Uber’s Future Looks Troubling: "Uber’s current $70 billion valuation seems difficult to justify. To reach profitability, both Uber and Lyft probably will be forced either to raise prices or to increase the cut they take from their drivers ... its core riding hailing business is faltering. Having faced a number of setbacks, Uber also is lagging in the longer term race to develop autonomous technology ..."
Uber’s "adjusted net revenue has started to decline.This points to a fundamental challenge with Uber’s business model that it has not yet figured out: How to keep prices low enough to attract riders while paying drivers enough to keep them from defecting — and still make a profit. Competition from Lyft, which is willing to suffer similar losses, makes this particularly hard."--cnbc.com.
U.S. stocks bounced back from deep losses Friday but still closed lower as trade-related jittersovershadowedstrong economic data--MarketWatch.com.
U.S. consumer sentimentrose to a 15-year high of 102.4 in May, well above the 97.1 expected by economists polled by MarketWatch.com and April’s reading of 97.2, according to the University of Michigan’s consumer sentiment index.
The Conference Board’s estimate of leading economic indicators for the U.S. (pdf) rose for the third straight month in April to 112.1, up 0.2% from March. The survey of economic conditions is a collection of forward-looking data that attempts to predict future economic growth.
"We think that China represents 15% of global GDP, yet less than 1% of all cross-border currency settlement is in their currency. It's important for us to realize that the joke is on us--ifthey were to open their capital accountand let Chinese invest abroad--their [China's] currency would depreciate 40% in a day. I think we're making the right moves here in taking a little bit of market pain to maintain our national security in the long run. Just so you can hear from me, I don't have a vested interest in China's currency any more. It's such an important moment in time for US national security that most of my interest has been moving toward the political sphere. If you can get over the fact that there's no rule of law there, and they don't respect human rights ... then maybe you should invest money in China."--Kyle Bass
Shocked Traders Respond To Trade War--"The biggest problem is the huge disconnect with what markets have been hoping for and what is transpiring now. Markets had priced the best-case scenario and odds are shifting towards the worst-case scenario."--zerohedge.com May 13, 2019
Long View
Investor Notes: Macroview | EU Elections (May 23-26): Brexit Party Surges: after parting ways with the increasingly irrelevant UK Independence Party (UKIP), Nigel Farage co-founded the Brexit Party [domain:thebrexitparty.org], which is now polling above the Labour and Conservative parties put together ahead of the European Parliamentary elections May 23rd:
France: "The 'yellow vest' demonstrations against Macron are basically the demonstrators who, more or less, voted for Trump here [U.S.]. It’s people coming from small cities, from rural areas, lower-middle-class, saying, 'We have been left behind.' And, on the right, our conservative party is moving in the same direction as the Republicans are here."--Gérard Araud, French Ambassador to the U.S., from 2014 until retiring 19 Apr 2019.
Editor's note: the Brexit Party also has Annunziata Rees-Mogg (twitter: @zatzi). Watch her in this YouTube video. She is the sister of well-known Conservative Party Brexiteer Jacob Rees-Mogg. For the Conservative Party, the problem is Theresa May: "For the Conservatives to go into a General Election without having delivered Brexit and with Theresa May as leader would be electoral suicide."
Apple and tech-industry allies said before the ruling that a decision allowing the lawsuit could lead to expensive antitrust claims against other companies that run online marketplaces, potentially affecting Alphabet Inc.’s Google, Amazon.com Inc. and Facebook Inc. See also: Apple Releases iOS 12.3 With New TV App and Channels Feature--macrumors.com. Will Amazon Put UPS Out Of Business?--zerohedge.com. See alsoAmazon Butts in on Google-Facebook “Duopoly” in the Huge Business of Internet Advertising. Publishers Hung Out to Dy--wolfstreet.com.
Microsoft or Google?$MSFT"has a bigger share in my portfolio ... because of its dividends, growth in cloud, improving margins, visionary leadership, and the improving FCFs"--seekingalpha.com.
Oracle is shutting down its R&D arm in China, laying off 900+ employees--zdnet.com. Online markets have grown 10X in the last two decades, more $1B-$10B+ software startups will exist, and startups can grow faster than ever--blog.eladgil.com.
Quicktakes:
Italy's watchdog investigates Google for alleged antitrust abuse;
