What You Need To Know This Week — July 13th, 2019
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.
VIRGIN GALACTIC TO GO PUBLIC VIA SPAC
Richard Branson’s space tourism startup Virgin Galactic announced that it is going public in a reverse merger with Special Purpose Acquisition Company (SPAC) Social Capital Hedosophia Holdings Corp. The SPAC will invest $800 million for a 49% stake in Virgin Galactic.
CAN’T TRUST CANNTRUST AS CANNABIS FIRM CONTROVERSY GROWS
Canadian cannabis producer CannTrust Holdings halted sales of its products, amounting to nearly 30,000 pounds of pot, amid a Health Canada investigation into illegal growing activities. CannTrust used fake walls to cover up illegally grown plants in unlicensed rooms in order to stage photographs that were sent to regulators.
FED CHAIR SETS THE STAGE FOR A JULY RATE CUT
Chairman of the Federal Reserve Jay Powell set the stage for a July interest rate cut during his testimony in front of U.S. Congress. Mr. Powell vowed to ‘act as appropriate’ to maintain the current economic expansion threatened by the trade war and a global economic slowdown. The dovish comments raised expectations that the Fed could cut rates this month.
BANK OF CANADA HOLDS INTEREST RATES STEADY AT 1.75%
On Wednesday the Bank of Canada announced that it was holding its benchmark rate steady at 1.75% for the sixth-straight meeting. The Bank, which was widely expected to maintain its benchmark rate, downgraded its 2020 domestic growth forecast from 2.1% to 1.9%.
ADDITIONAL ACTIVIST OPPOSES HUDSON’S BAY GO-PRIVATE OFFER AS COMPANY HIRES ADVISORS
Canadian private equity firm Sandpiper Group has joined a growing list of Hudson’s Bay shareholders who are opposed to the Chairman’s $9.45 go-private offer. Sandpiper’s founder previously stated that HBC could be worth as much as $35.00 per share. Meanwhile, HBC’s special committee hired financial advisors to help evaluate a $1 billion go-private offer.
Recommended Articles, Podcasts, Books and Tweets
Listen to why hedging with put options isn’t worth the cost on AQR’s Curious Investor podcast.
Valuation expert Aswath Damodaran on Acquisitions: “If you look at the collective evidence across acquisitions, this is the most value destructive action a company can take.”
“Skill in generating and processing information is an important source of hedge-fund returns”.
Deutsche Bank is shutting down its global equities business and cutting 18,000 jobs in a sweeping restructuring.
President Trump lashes out at bitcoin: “I am not a fan of Bitcoin and other Cryptocurrencies, which are not money, and whose value is highly volatile and based on thin air.”
About 2% of the European junk bond market is now negative yielding.
Analysts are forecasting the first earnings recession, defined as two back-to-back quarters of declining year-over-year corporate profits, since 2016. Forecasts expect S&P 500 companies’ profits to decline -2.8% in Q2, following a -0.3% drop in Q1.
-The Accelerate Team
