Beware the Ides of May
According to French President Emmanuel Macron, Trump will most likely pull out of the Iran nuclear deal by May 12. This will likely take much of the Iranian oil supply off global markets, further pushing the oil price higher. This would be in the interests of close US ally Saudi Crown Prince Mohamed bin Salman, who has a vested interest in isolating Iran and pushing the oil price as high as he can get it in preparation for the already-delayed Saudi Aramco IPO, now scheduled for 2019. Prepare for higher oil prices (NYSEARCA:USO) by May in that case.
Be Careful What You Wish For, Jerry Powell
Over the next 9 days, the Federal Reserve may well indeed get all its wishes fulfilled in one snapshot in time. How long everything will stay in range though, is the $4 trillion question. (The size of the Fed’s balance sheet. $64,000 doesn’t cut it these days). Every overshot involves hitting the bull’s eye at some point after all. GDP and the employment cost index come in on April 27th. The Personal Consumption Expenditures (PCE) index, the Fed’s #1 measure of inflation, clocks in on April 30th, and prognosticators are predicting that it will finally hit the 2% mark for the first time since 2012. The next roll out of Treasury auctions will be posted on May 2, which will likely have an effect of further exacerbating interest rates higher due to the record Federal budget deficits. May 4th will be the jobs report, so a lot to consider.
Chipotle No Longer Synonymous With Food Poisoning
Remember when the first thing that popped into our minds when we heard Chipotle Mexican Grill (NYSE:CMG) was food poisoning? Not anymore! Though the stock is still down substantially from its all-time highs, yesterday’s earnings report beat expectations. However, the reasons were somewhat ominous. In another sign of higher inflation, the reason that Chipotle’s earnings were higher was that the restaurant chain raised menu prices. They still had fewer customers despite the earnings beat.
China Soothing Trump on Trade?
In a move that will surely be welcomed by anyone who drives a car in China, Reuters reports that the People’s Republic is considering cutting import tariffs on passenger cars by 50% or more, to as low as 10% from the current 25%. As for the chances that this will happen, they are currently anywhere between 0% and 100%, and this we can be sure of. We will find out next month what actually happens when the decision will be made. Compared to the US tariff of 2.5% on imported cars, the tariff of 25% is 1000% higher. Could it be that President Trump’s negotiating tactics are working, or is something else at play here? To find out, try the White House hotline at 202-456-1111.
Facebook Still The Face of Social Media
Facebook (NASDAQ:FB) reported earnings after market close yesterday and reassured everyone that it is still very successful at connecting people. Apparently, its users are none too upset about being targeted more accurately by advertisers, and people keep using the service. Shares were up over 7% after hours on a 63% profit beat, though it remains to be seen if those gains will be held for the rest of the week as cracks in the equity market are beginning to widen.
Cryptos Keep Hovering
Bitcoin (BTC) maintained its recent gains, sitting just below $9,000. The crypto-collapse remains in abeyance for now though recent price movements have been very unstable. In other digital currency news, blockchain technology has become more popular with non-profits.