It’s the End of the Rate Hiking Cycle As We Know It, And Fed Feels Fine
Yesterday’s press statement from the Federal Open Market Committee, the term that the Federal Reserve prefers to call itself when deciding when and how to intervene in the bond market to tinker with overnight interest rates, was received dovishly and positively by everything except the dollar, which fell nearly a full point on the Dollar Index. The dollar-tracking ETF (NYSEARCA:UUP) has fallen over 1.3% in the last week, a big move for a big currency. The Fed indicated that this may be the end of its current rate hiking cycle, or at least that’s the way markets read the statement, which used the word “caution” when describing the pace of further rate hikes. Obviously this could be read in many ways, but the herd chose to read it bullishly and dovishly, like a bull with the wings of a dove, or maybe a dove the size of a bull with horns. Gold (NYSEARCA:GLD) shot up to $1,325 an ounce, and the S&P 500 climbed over 1.5%, the Nasdaq 2.2%.
Crazy New Cameras From Apple In the Works, Maybe
Apple (NASDAQ:AAPL) is going all out with its new cameras for future iPhones in an attempt to juice up sales again after a Chinese slowdown and general iPhone fatigue. According to Bloomberg, Apple is in talks with Sony (NYSE:SNE) to soup up the 2019 model with three rear cameras as opposed to 2018’s two, and a front and rear 3D camera system for augmented reality overlays. More powerful zoom, wider field of vision, and a “laser-powered” 3D camera to improve depth perception. Technically, lots of stuff in the iPhone is “laser-powered” but whenever somebody says “laser” consumers get all tingly, so it’s a good word to use in a press release. The 2025 version of the iPhone will reportedly have 4D cameras that can take pictures across time, so we’ll be able to see the future and the past. (Not really, at least that we know of, but that would definitely increase iPhone sales.)
Speaking of Apple, Apple Watch and Apple Pay Are Killing It
Apple’s iPhone sales may have taken a steep 15% hit last quarter according to its latest quarterly report, but the two fastest growing segments for the tech giant last quarter were wearables, up 33%, and services including Apple Pay, up 19%. The impressive jump was mostly ignored by the mainstream, which was myopically focused on the iPhone sales decline. But competition in the Near Field Communication (NFC) payment sector appears to be ramping up, most recently from Discover Financial Services (NYSE:DFS) and Garmin (NASDAQ:GRMN). The two have teamed up with Nxt-ID (NASDAQ:NXTD) to provide a contactless payment solution linking a Discover credit card with a Garmin smartwatch powered by Nxt-ID’s FitPay. “As payment processing moves inexorably towards contactless payments, it is crucial for payment processers to stay ahead of the curve. Working with Discover and Garmin to enable quick payments on the move is one more step in that direction,” said Nxt-ID CEO Gino Pereira.
Extreme Cold Ground GM In Bid to Conserve Natural Gas
It’s WAY too cold in Michigan. So much so that General Motors (NYSE:GM) had to suspend production at 11 of its Michigan plants in order to conserve natural gas resources to people don’t freeze to death. Ford (NYSE:F) and Fiat Chrysler (NYSE:FCAU) were also affected. Requests were made to suspend production by an affiliate of CMS Energy (NYSE:CMS). CMS has said that the cuts were not enough and urged residents to turn down thermostats so as to save heat for nursing homes and hospitals. Really, they could just up the price, which is what you do to stop shortages so that only the facilities that absolutely need the heat will use it. But since that would technically be considered “price gouging,” it is illegal, meaning that companies have to rely on the good will of their clients instead of their economic interests, which is generally not a good idea when lives are at stake.
Congress Moves To Limit Trump’s Trade Power
This could get interesting. A bipartisan move from Congress seeks to limit the President’s power to levy tariffs single-handedly for national security reasons without congressional approval. A new bill would require Congress to sign off on any future tariffs that President Trump wants to impose, making it much more difficult for him to exacerbate the ongoing trade war. The bill is called the Bicameral Congressional Trade Authority Act, and would stop the trade war in its tracks and probably ease tensions with China. Markets would probably respond well to its passage, but it would almost certainly need a two thirds majority in order to overcome Trump’s veto, which he would surely use if the bill got a majority in both houses.