Client Login

WALL ST SLIDES AS U.S.-CHINA TRADE WAR ESCALATES

SECTION SELECTION

US FINANCIAL MARKET | US ECONOMY & POLITICS
 EUROPE & WORLD | TODAY IN HISTORY

DAILY MARKET REPORTS

  • U.S stocks slid on Wednesday amid a broad selloff on escalating trade war tensions after the United States threatened to impose tariffs on an additional $200 billion worth of Chinese goods.
  • Washington on Tuesday issued a list of thousands of Chinese imports that the Trump administration wants to target with new tariffs. In response, China accused the United States of bullying and warned it would hit back.
  • Adding to tensions was the NATO summit in Brussels, where President Donald Trump accused Germany of being a “captive” of Russia. He also wants Europeans to pay more for their own defense.
  • The technology sector slid 0.21%. Chipmakers, which largely depend on China for their revenue, weighed the most, with the Philadelphia semiconductor index falling 1.43%.
  • 21st Century Fox fell 2.2% after the media company raised its offer for Britain’s Sky, seeing off rival bidder Comcast for now. Comcast rose 1.5%.

US FINANCIAL MARKET

Boeing’s first-half deliveries up 7%, orders surge past Airbus

  • Boeing’s first-half aircraft deliveries rose more than 7%, lifted by demand for its bestselling 737 jetliners as airlines seek more fuel-efficient planes, and orders were more than double those of European rival Airbus.
  • Chicago-based Boeing had 460 net aircraft orders in the first half of 2018, compared with Airbus’s 206, rebounding after losing that race to Airbus last year.
  • Boeing has said it aims to ship between 810 and 815 commercial aircraft in 2018, as much as 6.8% more than the industry record 763 jets it delivered in 2017, putting it ahead of Airbus for the sixth year in a row. Airbus forecasts delivering around 800 planes in general for 2018.

Criminal case sheds light on Apple self-driving car technology

  • A criminal complaint filed Monday against an ex-Apple employee for allegedly stealing selfdriving car trade secrets from the company provides a handful of new details about its work on the technology, experts said.
  • The complaint for the first time gave an official account of some details of the self-driving car program. About 5,000 employees were authorized to access program information, including about 2,700 “core” employees with access to secret databases.
  • It also said the employee was shown a “proprietary chip” by his co-workers and designed circuit boards to analyze sensor data, suggesting Apple may be designing its own chips for self-driving systems and working on technologies such as “sensor fusion,” in which data from multiple sensors is combined to make it more accurate.
  • Apple has kept tight wraps on its ambitions for self-driving cars, declining to acknowledge them at all publicly until it wrote a letter to U.S. transportation regulators in late 2016 urging them not to restrict testing of the vehicles.

Key Chinese Electronic Parts and Seafood Targeted in Latest U.S. Tariff Threat

  • Chinese electronic components used to run computer networks and secure critical internet connections are the big target in the Trump administration’s new plan to expand tariffs, but the proposed levies will also hit fish, furniture and lighting fixtures.
  • That includes $23 billion in switches, routers and other devices for data transmission that the U.S. imported from China last year, according to the International Trade Centre, a global trade organization.
  • The list also includes $11.6 billion in printed electroniccircuit assemblies that are used for data processing, according to the international agency, which compiled the list based on U.S. Census Bureau data.
  • The move is seen accelerating an existing trend to return some production to the U.S. and other developed markets.

Pfizer to split into three units, separates consumer healthcare

  • Pfizer said on Wednesday it would reorganize into three units, separating its consumer healthcare business that the U.S. drugmaker has been trying to sell since last year.
  • The units would be Innovative Medicines, Established Medicines and Consumer Healthcare. The company is currently split into two units – Innovative Medicines, which includes the consumer business, and Essential Health.
  • The Innovative Medicines business will now also include biosimilars and a new hospital business unit, and together with the Consumer Healthcare business, will account for about three-quarters of the company’s revenue.

Murdoch’s Fox ups Sky bid to $32.5 billion, all eyes on Comcast

  • 21st Century Fox has raised its offer for Britain’s Sky in an agreed deal valuing the pay-TV group at $32.5 billion, seeing off rival bidder Comcast for now.
  • Fox, which has been trying to buy the pan-European group since December 2016, offered to pay 14 pounds per share, a 12% premium to Comcast’s offer, but below the 15.00 pounds Sky shares were trading at on Wednesday.
  • Present in 23 million homes across Europe, Sky is a prized asset, with a direct relationship with its customers and a slate of top sport and original drama content. Fox’s offer represents an 82% premium to Sky’s shares in 2016 before the takeover drama started, and a multiple of 21 times 2017 earnings per share.

Fox Losing Money on World Cup Without U.S. Team

  • For 21st Century Fox this year’s World Cup was essentially decided when the U.S. men’s team lost to Trinidad and Tobago last October, and so failed to qualify for the tournament for the first time since 1986.
  • Without a U.S. team, early World Cup rounds on Fox’s networks drew nearly a third fewer viewers than in 2014, and the company is now expected to lose money on the 2018 tournament, according to people familiar with the situation.
  • Fox will spend some $900 million on soccer rights through the 2026 World Cup and plans to focus even more on sports if it follows through on a sale of entertainment assets to either Walt Disney or Comcast.

U.S. judge allows lawsuits over Monsanto’s Roundup to proceed to trial

  • Hundreds of lawsuits against Monsanto by cancer survivors or families can proceed to trial, a federal judge ruled, finding there was sufficient evidence to hear the cases that blame the company’s glyphosate-containing weed-killer for the disease.
  • The decision by a U.S. District Judge in San Francisco followed years of litigation and weeks of hearings about the controversial science surrounding the safety of the chemical glyphosate, the key ingredient in Monsanto’s top-selling weed-killer. Monsanto faces 5,000 lawsuits nationwide alleging Roundup caused cancer, mainly in state courts.
  • Monsanto denies the allegations and said it would defend the lawsuits with evidence proving there is “absolutely no connection between glyphosate and cancer,” claiming its position was supported by more than 800 scientific studies and reviews.

Uber’s HR Chief Leaves After Probe Into Handling of Discrimination Claims

  • Uber pushed out its human-resources chief after an investigation into her department’s handling of racial discrimination claims.
  • The departure of Liane Hornsey, who joined Uber in early 2017 from SoftBank, was announced to staff Tuesday in an email from Uber Chief Executive Dara Khosrowshahi. The email praised her as “talented, creative and hardworking.”
  • The people familiar with the company’s move said Ms. Hornsey resigned under pressure, following internal reports that she turned a blind eye to charges by anonymous employees of racial discrimination at the ride-hailing firm. Ms. Hornsey was the subject of a probe by one of Uber’s outside law firms into those claims.

Back to Top


US ECONOMY & POLITIC

U.S. says to slap tariffs on extra $200 billion of Chinese imports

  • The Trump administration raised the stakes in its trade war with China on Tuesday, saying it would slap 10% tariffs on an extra $200 billion worth of Chinese imports.
  • The new list published on Tuesday targets many more consumer goods than those covered under the tariffs imposed last week, raising the direct threat to consumers and retail firms.
  • U.S. officials released a list of thousands of Chinese imports the administration wants to hit with the tariffs, including hundreds of food products as well as tobacco, chemicals, coal, steel and aluminum. It also includes consumer goods ranging from car tires, furniture, wood products, handbags and suitcases, to dog and cat food, baseball gloves, carpets, doors, bicycles, skis, golf bags, toilet paper and beauty products.

U.S. job quits rate hits 17-year high; labor market tightening

  • More American workers voluntarily quit their jobs in May, government data showed on Tuesday, a sign of confidence in the labor market that economists say will soon boost wage growth.
  • In its monthly Job Openings and Labor Turnover Survey, or JOLTS, the Labor Department said the number of workers leaving jobs of their own free will increased 212,000 to 3.3 million.
  • That lifted the quits rate one-tenth of a percentage point to 2.4%, the highest since April 2001.

Services, motor vehicles lift U.S. producer prices in June

  • U.S. producer prices increased slightly more than expected in June amid gains in the cost of services and motor vehicles, leading to the biggest annual increase in 6-1/2 years.
  • The producer price index for final demand climbed 0.3% last month after rising 0.5% in May. In the 12 months through June, the PPI advanced 3.4%, the largest gain since November 2011. Producer prices increased 3.1% year-on-year in May.
  • Economists had forecast the PPI gaining 0.2% in June and rising 3.2% year-on-year.
  • In June, the cost of services increased 0.4% after climbing 0.3% in May. A 21.8% jump in the index for fuels and lubricants retailing accounted for about 40% of the rise in the cost of services last month.

Wholesale inventories up 0.6% in May, vs 0.5% gain estimate

  • The Commerce Department said wholesale inventories increased 0.6% instead of the 0.5% gain it reported last month. Stocks at wholesalers edged up 0.1% in April. They rose 5.9% year-on-year in May.
  • Wholesale auto inventories fell 1.2% in May after increasing 0.2% in April. Machinery inventories jumped 1.5% in May after rising 0.4% in April.
  • Sales at wholesalers accelerated 2.5% in May, the biggest increase since March 2011, after rising 1.4% in April. Sales of motor vehicles rebounded 2.9% after falling 0.4% in April.
  • At May’s sales pace it would take wholesalers 1.24 months to clear shelves, the lowest since November 2014, down from 1.27 months in April.

U.S. home refinancing requests drop to lowest since 2000: MBA

  • U.S. loan applications to refinance existing homes fell to their lowest in over 17-1/2 years even as most 30-year home borrowing costs fell last week, data from the Mortgage Bankers Association showed.
  • The Washington-based industry group said its seasonally adjusted index on homeowners’ requests for refinancing fell 3.8% to 958.5 in the week ended July 6. This was the lowest weekly reading since December 2000.
  • Refinancing’s share of weekly mortgage activity fell to its lowest since August 2008 at 34.8% of total applications. This compared with 37.2% the previous week, MBA said.
  • The average rate on 30-year loans backed by the Federal Housing Administration, which are often used by first-time home buyers or borrowers with patchy credit, rose to 4.80% from 4.78% the prior week.

Trump and Merkel Clash at NATO Summit Over Defense Spending, Russian Gas Deal

  • The NATO summit opened Wednesday to an acrimonious start as President Donald Trump and German Chancellor Angela Merkel exchanged barbs over Berlin’s defense spending and support for a major gas deal with Russia.
  • Mr. Trump began his visit by accusing Germany of being “captive to Russia” because of its support for Nord Stream 2, an offshore pipeline that would bring gas directly from Russia via the Baltic Sea.
  • Speaking in a meeting with NATO Secretary-General, Mr. Trump called Germany’s support for the project “very sad,” and said, “We’re supposed to be guarding against Russia, and Germany goes out and pays billions and billions of dollars a year to Russia.”
  • German Chancellor Angela Merkel fired back that Germany makes “independent policies” and “independent decisions” and said the country is the second-largest provider of NATO troops, after the U.S.

Pfizer delays drug price hikes after talking with Trump

  • Pfizer said it was deferring drug price increases for no more than six months after the company’s chief executive officer had an extensive conversation with U.S. President Donald Trump.
  • The rollback came a day after Trump took aim at Pfizer and other U.S. drugmakers for raising prices on some of their medicines, saying in a tweet that they “should be ashamed” and that his administration would respond.
  • It would defer price increases that went into effect on July 1 until the end of the year or until the president’s drug pricing blueprint goes into effect and would return drug prices to their pre-July 1 levels as soon as technically possible.

Back to Top


EUROPE & WORLD

China says will hit back after U.S. proposes fresh tariffs on $200 billion in goods

  • China accused the United States of bullying and warned it would hit back after the Trump administration raised the stakes in their trade dispute, threatening 10% tariffs on $200 billion of Chinese goods.
  • China’s commerce ministry said it was “shocked” and would complain to the World Trade Organization but did not immediately say how it would retaliate. In a statement, it called the U.S. actions “completely unacceptable”.
  • The $200 billion far exceeds the total value of goods China imports from the United States, which means Beijing may need to think of creative ways to respond to such U.S. measures.
  • Beijing has said it would hit back against Washington’s escalating tariff measures, including through “qualitative measures,” a threat that U.S. businesses in China fear could mean anything from stepped-up inspections to delays in investment approvals and even consumer boycotts.

After Tesla deal, Shanghai to speed up cancellation of foreign ownership limits

  • Shanghai will accelerate efforts to cancel restrictions on foreign investment in the auto manufacturing sector, a government official said on Wednesday, a day after Tesla said it would build a wholly owned auto plant in the city.
  • Earlier this year, China said it would scrap foreign ownership caps for companies making fully electric or plug-in hybrid vehicles in 2018 and all automotive ventures by 2022 – a major policy shift in the world’s top car market that has capped foreign ownership in the sector at 50% for over two decades.
  • The Shanghai government said in a statement on Tuesday it welcomed Tesla’s move to invest not only in a new factory in the city but in research and development.

Australia prepares to ban Huawei from 5G project over security fears

  • Australia is preparing to ban Huawei from supplying equipment for its planned 5G broadband network after its intelligence agencies raised concerns that Beijing could force the Chinese telco to hand over sensitive data, two sources said.
  • Huawei, the world’s largest maker of telecommunications network gear, has promised that Canberra will have complete oversight of 5G network equipment, which could include base stations, towers and radio transmission equipment.
  • Western intelligence agencies have for years raised concerns about Huawei’s ties to the Chinese government and the possibility that its equipment could be used for espionage. But there has never been any public evidence to support those suspicions.

Airbus wins JetBlue order for its newly rebranded A220

  • Airbus scored a key victory on Tuesday, with U.S. airline JetBlue announcing it would buy 60 of its A220-300 narrowbody jets, the first major order for the planemaker’s newly rebranded program as its battle with rival Boeing intensifies.
  • The A220 will replace JetBlue’s existing fleet of 60 Embraer E190 aircraft, with those jets retiring beginning in 2020.
  • The jets will be powered by Pratt & Whitney Geared Turbofan (GTF) PW1500G engines. Pratt & Whitney is owned by Connecticut-based United Technologies.

India’s Vistara orders Boeing, Airbus jets worth $3.1 billion in growth plan

  • Indian airline Vistara has placed firm orders for six Boeing 787 jets and 13 Airbus A320neos valued at $3.1 billion at list prices, as it looks to add more domestic flights and launch international routes later this year.
  • The order for Boeing’s 787s marks a new setback for Airbus in an intense battle for widebody orders as the European planemaker seeks to strengthen the order book for its upgraded A330neo passenger jet.
  • The joint venture between India’s Tata Sons and Singapore Airlines said it would procure another 37 A320neos from leasing companies and also had purchase rights over 4 more 787-9s and options over 7 more A320neos.

JD.com’s finance unit raises $2 billion, doubles valuation

  • JD.com’s finance arm has raised at least 13 billion yuan ($1.96 billion) in fresh equity from Chinese investors, doubling its valuation ahead of an expected initial public offering, people with direct knowledge of the matter said.
  • JD Finance’s fundraising round establishes its valuation at 120 billion yuan. The valuation is double the roughly 60 billion yuan it was estimated to be worth after it was split from JD.com, China’s second-largest e-commerce firm, in mid-2017.
  • JD Finance’s fundraising follows that of Ant Financial, the affiliate of its arch rival Alibaba, which last month was valued at $150 billion when it raised $14 billion in the world’s largest-ever single fundraising by a private company.

U.S.-China trade row helped BASF land $10 billion Guangdong chemicals coup

  • Germany’s BASF managed to wrap up a preliminary deal to build China’s first wholly foreignowned chemicals complex quite quickly, aided in part by trade tensions between Beijing and Washington, sources with knowledge of the matter said.
  • The proposed complex, worth some $10 billion in investment to 2030, will be located in Guangdong, China’s most populous province which had been worried about the impact of a U.S. decision to heavily penalize telecom firm ZTE, also based there.
  • BASF’s announcement, part of $23 billion worth of bilateral deals unveiled as German Chancellor Angela Merkel met Chinese Premier Li Keqiang in Berlin this week is conspicuous for its timing, trade and chemical industry experts said.

Back to Top


TODAY in HISTORY

  • Pope Clement VII excommunicated England’s King Henry VIII. (1533)
  • Former vice president Aaron Burr fatally wounded former secretary of the treasury Alexander Hamilton in a duel. Hamilton died the following afternoon. (1804)
  • Babe Ruth made his major league baseball debut as a pitcher for the Boston Red Sox. (1914)
  • The Rev. Dr. Martin Luther King, Jr., was posthumously awarded the Presidential Medal of Freedom for his work to advance civil rights. (1977)

This information has been prepared from sources believed to be reliable, but no representation is being made as to its accuracy or completeness. The information provided should be used only as general information and is not intended to provide specific advice or recommendations for any individual. The economic forecasts set forth in the material may not develop as predicted. All indices, such as the S&P 500, are unmanaged and may not be invested into directly. Sources: Reuters, Bloomberg, Wall Street Journal.

Content posted by third parties on this site is screened in order to protect clients’ privacy and comply with regulatory requirements. Content containing sensitive personal information, inappropriate language, information about specific investments, misleading information, information about other companies or websites, or information related to litigation will be removed. Content posted by third-parties on this site remains the responsibility of the party posting the content and is not adopted or endorsed by Pence Wealth Management or LPL Financial. Any opinions or statements posted by third parties are their own and may not be representative of the experience of others and are not indicative of future performance or success. Third party content on this site does not reflect the views of LPL Financial and have not been reviewed by LPL Financial as to accuracy or completeness.

Comments are closed.

All Financial Consultants at Pence Wealth Management are Registered Representatives with, and securities and Advisory services offered through LPL Financial, a Registered Investment Advisor, Member FINRA & SIPC. Financial Planning offered through Pence Wealth Management, a Registered Investment Advisor and separate entity from LPL Financial. The LPL Financial representative associated with this website may only discuss and/or transact securities business with residents of the following states: Alaska (AK), Alabama (AL), Arkansas (AR), Arizona (AZ), California (CA), Colorado (CO), Connecticut (CT), Delaware (DE), Florida (FL), Georgia (GA), Hawaii (HI), Idaho (ID), Illinois (IL), Kansas (KS), Kentucky (KY), Louisiana (LA), Massachusetts (MA), Michigan (MI), Minnesota (MN), Mississippi (MS), Missouri (MO), Montana (MT), Nebraska (NE), Nevada (NV),

New Hampshire (NH), New Jersey (NJ), New Mexico (NM), New York (NY), North Carolina (NC), North Dakota (ND), Ohio (OH), Oklahoma (OK), Oregon (OR), Pennsylvania (PA), Rhode Island (RI), South Carolina (SC), South Dakota (SD), Texas (TX), Utah (UT), Virginia (VA), Washington (WA), Wyoming (WY), Washington (DC)

Laila Marshall-Pence CA Insurance Lic# 0545421

BC_badge_black_small