Market Morning: Iraq Votes to Expel US Army, Iranians Boiling

Iran to Respond Militarily, Iraq Votes to Expel US From Iraq, Trump Refuses

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Major General Hossein Dehghan, military adviser to Ayatollah Khamenei, has told CNN that Iran’s response to the assassination of General Qassem Soleimani will be military in nature. Presumably this is as opposed to targeting civilians in reprisal. He said that the retaliation would be against US military sites. He added that revenge would come from Iran itself, and not any of its proxies. Dehghan is a former Defense Minister for Iran.

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“It might be argued that there could be proxy operations,” he said, “We can say America, Mr. Trump, has taken action directly against us — so we take direct action against America.” There are currently about 5,000 US troops stationed in Iraq with more in neighboring Saudi Arabia. There are also US troops in Qatar, Bahrain, Jordan, Kuwait, and the United Arab Emirates. He also said that any retaliation would not be immediate, but well-considered with “decisive deterrent effect.” It is unclear if any action from Iran would actually deter the United States government from flexing its military might in the region.

Meanwhile, the Iraqi Parliament, set up by the US after its invasion of Iraq in 2003 on the premise of keeping the world safe for democracy, has voted democratically to expel all US soldiers from Iraq. President Trump has refused, saying that Iraq has to pay the US for the air base it built in the country, on the premise of keeping the world safe for US government spending.

In Iran, literally millions of people have packed the streets for General Qassem Suleimani’s funeral procession. This may not end too well.

Hong Kong Protests Continue Into 2020

Speaking of protests, the protests in Hong Kong continue into the new decade. This time, thousands marched near the Hong Kong/Chinese border, the message being leveled at Chinese traders who enter Hong Kong to buy duty free goods and sell them across the border. Protesters are upset about this because it pushes up prices, but it also pumps money into the Hong Kong economy, which they don’t seem to be taking into account. “The mainland Chinese come here, block the streets with their bags … rents have gone up and it has made things more expensive for Hong Kongers,” said Jasmin, quoted by Reuters, a 19-year old student. Riot police stormed the protest and started beating protesters at one point when they refused to disperse.

Tesla Cuts Model 3 Prices in China

What does that have to do with the price of the Model 3 in China? Tesla (NASDAQ:TSLA) has cut the price of the Model 3 in the People’s Republic down to 323,800 yuan from 355,800. Beijing still subsidizes electric car purchases so the final price is usually below 300,000 yuan. China’s annual car sales have been falling for two years, though it is still the largest car market in the world. The cars were produced in Tesla’s only factory in China. Tesla shares achieved a new all time record high on Friday at $454 a share.

Volvo, Daimler, Team Up to Reinvent Internal Combustion

Not quite reinventing the wheel, but close. Volvo, owned by Geely (OTCQB:GELYF) and Daimler (OTCQB:DDAIF) are thinking about cooperating to improve the efficiency of the internal combustion engine. The Automobilwoche weekly magazine cited a Volvo executive that cited recent talks with Daimler but with no concrete plans with numbers behind them yet. Geely also owns a 10% share in Daimler, so the two companies are already partially working together anyway. The initiative may be a response to the deterioration of global trade relations, forcing companies to work together to cut production costs. The two companies have previously said they plan to build Smart electric cars in China through a joint venture.

US Manufacturing Sector Continues to Contract

The ISM manufacturing index continues to fall, hinting that the real economy may be struggling, as opposed to the paper economy through the eyes of the stock and bond markets. ISM fell for a the fifth straight month to 47.2, down from 48.1. Any reading below 50 is considered contractionary. This was the weakest reading since June 2009 at the very end of the last recession. This could also have something to do with the tariff war. “Global trade remains the most significant cross-industry issue, but there are signs that several industry sectors will improve as a result of the phase-one trade agreement between the U.S. and China,” Timothy R. Fiore, chair of Institute for Supply Management, said.

London Stock Exchange Targeted in Cyber Attack?

Was the London Stock Exchange (OTCQB:LNSTY) the target of a cyber attack back in August? British intelligence believes this may just be the case. There was an outage at the LSE back on August 16 that was blamed on a software glitch, and an LSE spokesperson denied that the problem had anything to do with cybersecurity at the time. The issue had delayed the opening of the exchange for more than 90 minutes, but no agency pursued the possibility that it was terror related or otherwise politically motivated. The fact that this news is coming out now may be a signal that dots are trying to be connected to paint a picture against Iran as a troublemaker.


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