Market Morning: IMF Shivers, Google Delivers, Japan Freezes, Boeing Pleases, Sort Of

Stock Market Roundup

IMF Getting Nervous On Economy: Don’t Make Any Sudden Movements

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The IMF is getting quite wary of the prospects for continued economic growth, and has therefore issued a warning against governments around the world not to engage in petty trade wars, and instead recommended that governments take the economic version of the Hippocratic Oath to Do No Harm. The logic being that actual wars are bad for stuff, as the point of war is to destroy as much stuff as possible, ergo trade wars are bad for trade, as the point of trade wars is to destroy as much trade as possible. This leads to higher prices, given the amount of money in the world keeps increasing, and less trade means less stuff, means more money in exchange of the stuff that remains. That’s the basic gist of it. In the words of the IMF, “We see downside risk and that means one has to be very careful,” IMF First Deputy Managing Director David Lipton told Bloomberg Television on Friday. “With trade tensions, not knowing where monetary policy is going to go, not knowing how Chinese growth will turn out, it’s time to make sure policymakers do no harm.”

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Alphabet Takes Wing to Australia, Drone-Delivered Coffee for All

Alphabet (NASDAQ:GOOGL) has launched a drone delivery service in Australia through its subsidiary Wing. The initial rollout will be very limited and include only a few select suburbs in the Outback. The service has been in testing mode for 5 years now. So far it has completed 3,000 deliveries of goods from local businesses. It may be expensive at first, but here’s what Wing wrote about this on its blog: “Whether you’re a parent with a sick child at home and have run out of baby paracetamol, a busy professional who forgot to pick up fresh bread during your regular weekly shop, or you simply just want to order your morning flat white without the hassle of having to drive to the cafe, Wing has teamed up with local Canberra businesses to give customers the opportunity to have a range of goods delivered in a handful of minutes.”

Japan Nearing Record 10-Day Shutdown, Traders Fret

Japan is about to enter its “Golden Week”, a long series of national holidays which will stretch an entire 10 days from April 27 to May 6 because in addition to the traditional Golden Week schedule there is also the accession of Japan’s new Emperor, Crown Prince Naruhito, to the throne. This will be the longest stretch of closed markets since the end of World War II, when Japan was really tired of being bombed with nuclear weapons, which was a pretty good excuse to take a bit of a break. The excuse now, the installation of a practically useless figurehead, isn’t as convincing, and its making market makers nervous due to the possibilities of cash shortages and flash crashes before and after the long hiatus.  Traders in Japan won’t be able to open or close any positions in response to the deluge of economic data due in this period, so we could see a flurry of activity once markets restart, and it could be rather extreme, depending on what news comes out while Japan is on its break. (NYSEARCA:EWJ)

Boeing 737 Software Patch Nearing Completion

Boeing (NYSE:BA) is finishing up software patches needed to keep its 737 MAX planes from erroneously forcing down the noses due to a bad sensor readings on the angle of attack. About two-thirds of active 737 customers have been able to test the patch in a flight simulator in 96 flights totaling 159 flight hours. There was no word by CEO Dennis Muilenberg on when the planes would be back in the air, but at least there’s progress. Meanwhile, orders for 737 MAX airplanes have plummeted, with only 10 being ordered in January and February this year, and 0 last month. Thousands of previous orders for the plane were still on the books and have yet to be fulfilled, meaning customers aren’t running away in droves just yet. They’re just not making new orders until they know that the planes won’t dive into the ground if a bird hits the angle of attack sensors.

Disney Undercuts Netflix, Streaming World Quakes In Boots

Disney (NYSE:DIS) is looking to undercut Netflix (NASDAQ:NFLX) by about 50% with an extremely low price for its new streaming service, Disney+. We hope for all our sakes it isn’t like Google+, which more like Google-. The service was unveiled last Thursday but won’t be available until mid November in the United States, after which Disney is planning a staged global rollout. Disney is targeting 60M to 90M users by 2025, and to be investing about $2B a year on original programming by then. The initial price point of $6.99 a month won’t be profitable, but what they are trying to do is essentially buy users with the attractive pricing, pull them away from Netflix, and get them hooked on Disney by loading it up with, yes, all of Disney’s movies over the year, including Pixar and Star Wars and Marvel etc. An in-house giant that doesn’t have to pay to license its own stuff of course, so they can afford to undercut Netflix, which still does have its own original content. It should be an interesting productive war, unlike a trade war or hot war, a war to produce stuff instead of destroy it.


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