What You Need To Know This Week — May 11th, 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.
U.S. TRADE WAR ESCALATES AS TRUMP IMPLEMENTS ADDITIONAL TARIFFS
The U.S. increased tariffs on $200 billion of Chinese goods from 10% to 25% after the Chinese allegedly reneged on some of their previous commitments regarding the potential trade agreement between the countries. Representatives between the U.S. and China had discussions over two days this week that were “constructive”, according to U.S. Treasury Secretary Steve Mnuchin. The S&P 500 dropped -2% for the week on negative trade war headlines.
OCCIDENTAL WINS THE ANADARKO TAKEOVER BATTLE AS CHEVRON BOWS OUT
Interloper Occidental ended up winning the takeover battle for Anadarko after friendly bidder Chevron decided not to match Occidental’s superior proposal. Occidental won by not only paying a higher price and allocating a larger portion of cash to its bid. The cash portion of Occidental’s bid was made possible from Warren Buffett’s $10 billion backing of the deal through a preferred share plus warrant investment, along with a sale of Anadarko’s African assets to Total for $8.8 billion. Chevron’s stock rose 3.8% on the news, while both Occidental and Anadarko’s shares dropped -4.1% and -2.4% respectively.
CANADA REPORTS BLOWOUT JOBS NUMBERS WITH ITS BIGGEST GAIN ON RECORD
The Canadian economy added an unexpected 106,500 net jobs in April versus the 10,000 expected by analysts. This was the largest job gain since the government started collecting data in 1976. The unemployment rate dropped from 5.8% to 5.7%. Ontario and Quebec accounted to 80% of the growth in jobs. The loonie traded 0.6% higher on the news.
UBER IPO FIZZLES AS IT DROPS BELOW ITS LISTING PRICE
The ride-hailing giant fell -7.6% in its stock market debut, a rare stock decline for the heavily-hyped company. The lackluster share price performance comes amidst a 3x oversubscribed order book for Uber’s newly issued stock. The tepid market response came amidst a -29% drop for competitor Lyft since its recent IPO, in addition to trade tensions.
Recommended Articles, Podcasts, Books and Tweets
Listen to Dan Rasmussen talk about disrupting private equity on the Wall Street Lab podcast.
Warren Buffett and Charlie Munger slam private equity for manipulating their returns and their reliance on leverage.
A profile of junk bond king Michael Milken and his redemption after serving time in prison.
Goldman Sachs missed out on leading the Uber IPO, but still scored with a 12,000% return on its early stage investment in the startup.
The yield curve once again inverted, an ominous sign for investors as it has a good track record at predicting recession.
Shaving startup Harry’s bought by Schick for $1.4 billion.
Japanese company Softbank plans a second $100 billion Vision Fund to invest in private technology companies, just two years after raising its first $100 billion fund.
Disney wrote down its $400 million investment in Vice Media to zero.
-The Accelerate Team
