Market Morning: Iran Plays Trump…Card, Eurobank Earnings, $1B Apple Lawsuit

Market Morning: Iran Plays Trump…Card, Eurobank Earnings, $1B Apple Lawsuit

Iran Threatens to Play “Trump” Card And Block Straits of Hormuz

Iran is obviously upset about President Donald Trump moving to prevent Iran from selling its own oil and has threatened to block the Straits of Hormuz if the United States moves to block all countries from buying Iranian crude. The only way the US could possibly enforce this is to cut off all offending countries from the SWIFT system that connects the global banking system, controlled by the US dollar and therefore by the US. However, doing so threatens whatever is left of dollar hegemony, and if the Iranians actually do decide to block the straits, through which 20% of global oil supply travels daily, the oil price (NYSEARCA:USO) will skyrocket and the US dollar will fall (NYSEARCA:UUP) anyway. Meaning, taken together, this is a really risky move for the dollar, since China is involved, which has been busy building alternative oil contracts to bypass the dollar in the first place. They may be ready to get off the dollar standard by trading oil directly with Russia, and if they are, the dollar could be in for some serious trouble in the short term.

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Credit Suisse Kicks Off European Banks Earnings Season

Credit Suisse (NYSE:CS) beat earnings expectations with a $735M for the quarter, and revenue of CHF539B. “The positive momentum we observed towards the end of the first quarter has broadly continued into April. It is still too early in the quarter to draw definitive conclusions about our performance for the rest of 2019,” Credit Suisse said. This was the first quarter after the completion of the bank’s restructuring. Switzerland’s overnight lending rate stands at -0.72% where it has been since 2015, though the balance sheet of the Swiss National Bank topped out at CHF843B in December of 2017. Inflation in the country remains muted at just 0.5%. Monetary policy in the country is still as loose as it has ever been, meaning watch out when it eventually starts to tighten, especially for bank stock investors.

US Arrests Another Chinese National for Allegedly Spying on General Electric

This is good timing for another round of trade talks between the US and China, not to mention the attempt to cut China off from importing Iranian crude oil. A former engineer and a Chinese businessman have been charged with economic espionage and conspiring to steal trade secrets from General Electric (NYSE:GE) to benefit China. According to the indictment, Zheng stole proprietary data on GE’s turbine technology by encrypting the files on his computer and secretly embedding them into a digital photograph of the sunset before emailing the photograph to his personal email. Now that’s some sophisticated next level cryptographic stuff.

18 Year Old Sues Apple for $1B For False Arrest From Faulty Facial Recognition Software

Apple (NASDAQ:AAPL) is being shaken down by a teenager, and perhaps for good reason, too. A thief who had the kid’s photoless driving learner’s permit were caught stealing from an Apple store. The thief then identified himself as him, and the Apple store employee took him at his word, putting his face into a facial recognition system. Then the thief continued to steal at other stores, was caught on camera, which led the police to arrest the other kid, who is now suing apple for $1 billion for hardship and stress. He’ll probably settle for much less. Or this could be a very elaborate shakedown setup.

Alphabet Wing Gets FAA Go Ahead for Drone Delivery

Alphabet’s (NASDAQ:GOOGL) Google Wing just got an FAA go-ahead for drone delivery. The venture was classified as an airline by the bureaucracy and can now deliver things like food and medicine directly to homes after conducting 70,000 test flights in Australia. Amazon (NASDAQ:AMZN) and DHL are also working on drone delivery, which could really help reduce traffic on the ground if it gets off the ground, no pun intended.

Softbank Founder Loses $130M on Bitcoin

Founder of Softbank (OTCMKTS:SFTBY), the Japanese telecom giant, Masayoshi Son, apparently made a big bet on Bitcoin in December 2017 back when the cryptocurrency was at $20,000 a coin, and lost big. So corporate executives aren’t immune to getting sucked into speculative bubble crazes after all. The $130M was donated to whoever sold their Bitcoin (BTC-USD) to Son. Let’s hope it gets put to good use. Maybe he can write it off as a tax-deductable donation to unspecified people who were smart enough to sell at the top.