What You Need To Know This Week — January 25th, 2020
What You Need To Know This Week
A weekly recap to keep you informed on the most important events this week impacting markets, business, tech and the global economy.
CORONAVIRUS ROILS MARKETS AS THE OUTBREAK SPREADS
China went into an unprecedented lock-down as the fast-spreading coronavius, the deadly pneumonia-like virus, wreaks havoc in the country. Thus far, at least 26 people have died and 830 cases have been confirmed. Roughly 33 million people in China remain under travel restriction. Cases of the virus have also been reported in Japan and the U.S. Thus far, stock markets have been relatively calm regarding the outbreak.
XEROX PLANS PROXY BATTLE TO TAKE CONTROL OF RIVAL HP
Xerox indicated that it plans to nominate 11 directors to HP’s board, in a bid to take control of its competitor after several snubbed buyout offers. HP responded by saying the bid undervalues the company. HP’s stock continues to trade around Xerox’s $22.00 unsolicited offer.
TESLA’S MARKET CAPITALIZATION HITS $100 BILLION TO BECOME THE MOST VALUABLE AUTO GROUP
In a battle of the bulls versus the bears, long investors have come out on top as the controversial electric car maker’s stock market value has rallied three-fold over the past few months to reach $100 billion. The surge in its valuation has made Tesla the most valuable U.S. automaker and second globally, next to Toyota. Some question the valuation, given the company has never recorded an annual profit and produces a fraction of the cars of its competitors.
BANK OF CANADA LEAVES DOOR OPEN FOR A RATE CUT
Although Canada’s central bank chose to keep its policy rate steady at 1.75% as expected, Bank of Canada Governor Stephen Poloz indicated that weaker economic growth in the fourth quarter could lead to a rate cut in 2020 should the sluggishness continue. Market expectations for a rate cut in 2020 rose to 80%, up from 50% earlier in the month.
Recommended Articles, Podcasts, Books and Tweets
Listen to investment blogger Cullen Roche talk about contrarian investing ideas on The Investor’s Podcast.
A deep dive into why investors chase performance and a few techniques to prevent it.
The CFA Institute on how to replicate private equity with liquid public securities and making sense of volatility and correlation of private equity investments.
Legendary hedge fund manager Paul Tudor Jones on today’s markets: “We are just again in this craziest monetary and fiscal mix in history. It’s so explosive. It defies imagination. It reminds me a lot of the early ’99. In early ’99 we had 1.6% PCE, 2.3% CPI. We have the exact same metrics today. The difference is fed funds were 4.75%; today it’s 1.62%”.
Mark Machin, CEO of the Canada Pension Plan Investment Board, on private asset investing: “I do ring the alarm bell on not to be too invested in illiquid assets… I do worry about the expansion of a lot of funds like us around the world into private illiquid assets.”
One of the main reasons that pension fund Calpers invests in private equity is due to its lack of mark-to-market valuations, which they refer to as time diversification, and its ability to ostensibly reduce risk. ¯\_(ツ)_/¯
Purpose Financial is acquiring Wealthsimple’s financial advisor business. No terms were disclosed.
Genstar is close to buying Calgary-based research company RS Energy for $1 billion.
Canadian fintech startup Canalyst Financial Modeling raised $20 million in venture capital funding.
Quantitative hedge fund firm Two Sigma raised its first venture capital fund to invest in data-driven startups.
Goldman Sachs CEO, David Solomon, will be DJing at the super bowl under the moniker “DJ D-Sol”.
The (hilarious) rules to being a sellside economist: “the best approach is to emphasise the dangers of recession but claim this is at least 18 months away. If it happens sooner, you can say you correctly warned about the dangers. If there is no recession you can simply postpone your forecast and hope nobody remembers”.