What I Think I Learned Last Week #9
While September is historically the worst month, this September was the least volatile September in 66 years. According to The Wall Street Journal’s Market Data Group, the change between the index’s closing high and closing low for the month was 2.1%, the smallest since 1951.
A nightmare victory for Angela Merkel is what the German press is calling the German election. Merkel’s party, while winning the largest percentage of the vote, had its lowest result in the post-war era, losing more than a million voters to the right-wing AfD. Part of creating a governing coalition will see Wolfgang Schäuble, venerable head of the Finance Ministry, move to the ceremonial position of Speaker of the German Parliament. On the news, German bonds sold off.
Speaking of nightmares, Twitter is looking to expand its character limit from 140 to 280. Incoherent rants from certain world leaders can now be twice as long.
And let the trade wars begin! The US government decided to slap a big tariff of 220% on Canadian aircraft company Bombardier after Boeing complained that Bombardier had received unfair support from both the Canadian and UK governments. UK Prime Minister Theresa May, who had lobbied hard against this action, was « bitterly disappointed » by the action. The British government responded by saying Boeing’s contracts with the UK could be in jeopardy.
The Trump Administration announced its tax reform package, which cuts the corporate rate from 35% to 20% and introduces a one-time repatriation tax.
Japan’s Prime minister Abe is calling for snap elections trying to take advantage of his party’s recent approval boost, most of which has occurred due to the Korean crisis. However, Tokyo mayor Yuriko Koike announced the formation of a new party to attempt to upset Abe’s plans.
Equifax: a hack and then a whack. As a result of a massive data breach, CEO Richard Smith resigned.
In a story about hacks, The Economist reported that: « One casino recently suffered a data breach after hackers gained access to an internet-connected fish tank, and jumped from there to more sensitive parts of the company’s network. » An internet-connected tank? Do they think fish like to surf on the ‘net?
As reported by the Wall Street Journal, leveraged loan volumes are up 53% this year in the US, according to S&P Global Market Intelligence’s LCD unit, putting it on pace to break the record set in 2007. And we all remember what happened after that.
Marking its 14th straight month of expansion, China’s official PMI hit its highest level in over five years.
US oil prices returned to bull market status by bouncing more than 20% from its June 21 low and ramifications from Iraq Kurdistan independence efforts helped Brent oil end the third quarter with its strongest quarterly performance since 2004.
US pending home sales have dropped to a 19-month low as the chief economist for the National Association of Realtors said the housing market has stalled.
French consumer confidence fell for the third straight month. Before that, it had been going up. Then the French realized that would be an unacceptable sign of optimism. However, the rest of Europe likes being optimistic. Eurozone economic confidence rose to levels unseen in over ten years.
Germany’s Siemens and France’s Alstom have agreed to merge rail businesses. The result of the German-French merger will be trains that are precisely engineered to work in all conditions, except August.
In a speech during the week, Fed Chair Yellen defended the plan of moderate interest rate increases despite low inflation. Shortly thereafter, it was reported that it was highly unlikely that President Trump would renominate her to the Fed.
Dyson, the company known for its expensive vacuum cleaners, said it was developing an electric car that will be road-ready in 2020. I think they could really clean up. It is also good for Dyson that it will have one product that doesn’t suck.
And that’s what I think I learned last week….on to October!