Buy Services, Sell Goods, Says Goldman Sachs If Tariff War Explodes
The people at Goldman Sachs (NYSE:GS) may know a bit about trading, or maybe not, but either way, they’re saying to sell goods stocks and buy services stocks if the Chinese retaliate to the Trump Administration’s latest move to jack up tariffs on $200 billion worth of Chinese imports from 10% to 25%. China will almost certainly retaliate by harming itself and preventing its own people from buying American products at market prices without taking a cut for itself first. Anyway, Goldman suggests buying bank stocks like JPMorgan Chase (NYSE:JPM) and Bank of America (NYSE:BAC), as well as Mastercard (NYSE:MA), United Health (NYSE:UNH) and AT&T (NYSE:T) among others. On the sell list are goods stocks like Exxon Mobil (NYSE:XOM), Coca Cola (NYSE:KO), and Honeywell (NYSE:HON). For a better list, maybe go through the Goldman Sachs list is cross out the buys with too much leverage. Things could get rough in the debt markets if bonds are used as a retaliatory weapon.
Kudlow Admits Americans Pay Tariffs, Not China, and Emperor Trump Has No Clothes
Larry Kudlow, White House Economic Advisor, may be the next one to be fired on “The Apprentice: White House.” He meekly admitted on Fox News Sunday that “both sides” will pay for President Trump’s tariffs on Chinese goods, given the simple fact that importers actually in reality pay the tariffs by physically handing over money to US customs authorities when importing goods from China. China does not pay the money when the goods cross into American borders. The fact that this is the reality could easily by recorded on tape, yet Trump denies this somehow with a straight face. As Kudlow has admitted this, speculation is mounting that Trump may fire him for telling the truth, which everybody already knew anyway but which nobody has been allowed to say in words. Will Trump go Mad Queen a la Danaerys Targaryen while riding his Drogonian tariff policy? Let’s see.
Brexiters Strike Back For European Elections – Turn on EU C-SPAN
Starting Thursday and through Sunday, European Union members will elect their parliamentarians for representation in Brussels. So far, ultra mega Brexiter Nigel Farage is killing it with 34% of the UK vote, more than the Tories (the party that was supposed to push Brexit through parliament) and Labour (the party that was also voted against the Brexit deal despite a referendum that the UK wanted to leave) combined. Now voters can’t stand either of them, so Farage formed the “Brexit Party” and everyone’s voting for it. This is what EU authorities were afraid of when they granted the UK an extension past the EU elections, and now they’re paying for it. The practical implications of this are uncertain, but one thing’s for sure. Farage is going to have a field day in the EU parliament. He’s not going to behave himself, and he’s going to be pushing for a no deal Brexit and generally angering all the pro EU politicians in the building for a long time until they pretty much force the UK out just to get rid of Farage. Grab your popcorn and turn on the equivalent of EU C-SPAN. This should be fun.
Gilead Donates Truvada To Help End HIV In US, Nudge FDA to Approve Descovy
How much does positive press and an in with the government cost? However much it costs to provide 200,000 uninsured people every year through 2030 enough Truvada as part of the PrEP drug cocktail to prevent HIV infection in those at the highest risk for it. Gilead Sciences (NASDAQ:GILD) obviously thinks this will pay off in the long run. The drug costs $20,000 a year, so these are quite big numbers. It comes out to 2.4 million bottles of Truvada, which will transition to Descovy it the latter is approved. Or this could all just be a stunt (not necessarily a bad stunt, but a stunt nonetheless) to get its new HIV drug Descovy approved as part of PrEP. If it works, expect more donations wink wink in the future from other companies trying to get their own drugs past the FDA.
Uber Flub, Lyft Laughed Out of Town
Uber (NYSE:UBER) closed down over 7.5% on its IPO day, as those who got in on the IPO weren’t even able to sell it on the secondary market to investors for a profit. The stock rallied midday after falling sharply in the first hour of trading, but those gains evaporated in the final hour of trading. Lyft (NASDAQ:LYFT) didn’t do much better on the day, closing down 7.4% for the day on the lackluster Uber trading developments and hitting a new “all time” low, all time being a bit less than a month. Both companies are hemorrhaging cash and have been since inception, basically running on the willingness of investors to continue infusing both companies with cash in the hopes that eventually they’ll figure out how to make money. Meanwhile, drivers are antsy about greed and such, and they want more money, which means both companies will probably keep losing more and more until drivers can’t be paid at all because there won’t be any Uber or Lyft to pay them.
Philip Morris Caught With Pants Down Marketing Heated Tobacco Featuring Young People
Uh oh. Young people aren’t supposed to market tobacco. Philip Morris (NYSE:PM) was caught by Reuters for trying to market a new smokeless heated tobacco product by featuring the product being used by 20-something social media 15-minutes-of-fame type people. The ads are a bit misleading, and typically start off encouraging people not to start smoking, and if they started, to quit, but if they won’t quit, to change to heated tobacco. Shrewd stuff. “We have taken the decision to suspend all of our product-related digital influencer actions globally,” the company told Reuters. “Whilst the influencer in question is a legal age adult smoker, she is under 25 and our guidance called for influencers to be 25+ years of age. This was a clear breach of that guidance.” Must have been a faulty algorithm somewhere. Blame the AI.