What You Need To Know This Week — June 1st, 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.
PRESIDENT TRUMP NUKES USMCA AS HE STARTS A TRADE WAR WITH MEXICO
What’s better than one trade war? Two trade wars! President Trump, much to the dismay of pretty much everyone, made a surprise announcement that the U.S. was implementing new tariffs on all goods imported from Mexico. He did this to try to force the Mexican government to take more aggressive action to halt migrants from crossing from Mexico into the U.S. The tariffs could undermine a key economic relationship that has been in place for decades. In addition, the tariffs could put into jeopardy the ratification of the U.S.-Mexico-Canada Agreement (USMCA) to govern cross-border trade.
CARL ICAHN LAUNCHES ACTIVIST CAMPAIGN ON OCCIDENTAL
Vaunted activist investor Carl Icahn is suing Occidental because he’s upset that the company took expensive financing from Warren Buffett to get around holding a shareholder vote on its acquisition of Anadarko. Icahn indicated he may run a proxy contest to replace Occidental’s board of directors after the Anadarko deal closes.
CHINA DIGS IN ITS HEELS AS IT THREATENS TO RESTRICT RARE EARTH EXPORTS
Chinese media reported that the country is considering cutting exports of rare earth metals, which are critical elements for industries such as electric car manufacturers. If China limits rare earth exports, U.S. companies could find themselves short on manufacturing materials, which could negatively effect electric car makers Tesla and GM.
T-MOBILE AND SPRINT LOOK TO LAND DOJ APPROVAL FOR THEIR MERGER
The Department of Justice wants T-Mobile and Sprint to sow the seeds of a fourth national mobile competitor in order to garner anti-trust approval on the deal. This is in addition to Sprint’s commitment to sell its prepaid business Boost Mobile, which has rumoured to have gotten interest from Amazon. To satisfy the DOJ, Sprint and T-Mobile are considering the divestiture of some of their airwaves, which has attracted interest from cable companies Comcast and Charter.
Recommended Articles, Podcasts, Books and Tweets
Listen to AQR’s Cliff Asness and Alpha Architect’s Wes Gray discuss momentum investing and why it works.
Canada posts its weakest back-to-back quarters of economic growth since 2015, with Q2 and Q1 annualized growth clocking in at 0.4% and 0.3%, respectively.
CME Group launches the new “micro E-mini” S&P 500 contract to cater to smaller retail investors. The micro E-mini costs approximately $630 per contract.
Chinese tech giant Alibaba is pursuing a Honk Kong listing along with a $20 billion equity raise.
Fiat Chrysler proposes a EUR33 billion merger with rival Renault, which would create the third largest auto manufacturer worldwide.
The death of value investing has been greatly exaggerated. “As value investors systematically buy stocks with compressed multiples that later expand, the returns for value investors will likely exceed that of the market”.
Low-volatility and buffer ETFs rake in billions of asset flows as the S&P500 declines -6% for the month of May.
The Bank of Canada held interest rates steady for the fifth time in a row, while the Canadian dollar hit a five-month low.
-The Accelerate Team
