So Much For A Christmas China Trade Deal
The signing of the Hong Kong Human Rights and Democracy Act of 2019 had already put the prospects of a US trade deal with China in jeopardy, and now it seems that the chances of a deal by the end of the year have been completely scuttled. US President Donald Trump spoke about his feelings this morning to reporters in London, specifically that, “In some ways, I like the idea of waiting until after the election for the China deal, but they want to make a deal now and we will see whether or not the deal is going to be right.” Markets apparently do not like the idea of waiting until after the 2020 elections for a China trade deal, given that if Trump is reelected, he wouldn’t have much incentive to sign a deal. Plus, waiting another 11 months is just another year of uncertainty not ideal for businesses reliant on smooth trade flows between the countries. S&P 500 (NYSEARCA:SPY) and Nasdaq (NASDAQ:QQQ) futures are down slightly, but not catastrophically. Gold (NYSEARCA:GLD) has caught a bid on the news, with spot prices at about $1,470. The dollar index remains mostly unchanged.
France, Brazil, Argentina New Targets in Trump’s Trade War
New evidence that Trump is changing direction from reconciliation to more trade bullying, the President has threatened 100% tariffs on French cheese and wine, angering wine and cheese connoisseurs throughout France and the United States, the latter of whom may no longer be voting to Make Wine and Cheese Great Again. The tariffs would be at the modest, reasonable level of 100%, though no dates have been specified as to when they would be implemented. France has applied a 3% tax on digital services earned by firms with more than 25 million euros ($27.86 million) in French revenue and 750 million euros ($830 million) worldwide. This includes US tech giants like Alphabet (NASDAQ:GOOG), Facebook (NASDAQ:FB), and Netflix (NASDAQ:NFLX), so Trump thought it was a good idea to skim off the top of American wine and cheese consumers because the French would be skimming off the top of US tech FANG companies. In any case, wine tariffs already in force have not been working because importers found an enormous loophole in that the tariff only applies to wine in bottles. So they’re nixing the bottles, importing wine in vats, and bottling it in the US.
Rob Gronkowski Picks CBD Over NFL Return
Rob Gronkowski, the hall-of-fame-bound recent-retired tight end for the New England Patriots, has declined an opportunity to return to the NFL after yesterday’s deadline to do so has passed. He would have had to give up his endorsement of CBDMedic, which distributes medical cannabis products throughout major US pharmacies. The NFL does not endorse CBD because it’s a Schedule 1 substance with no medical benefit, according to the senators and congresspeople that voted to consider it such back in the 1970’s. This consensus may no longer be up to date, but the NFL follows federal law, so its players cannot endorse the substance. Gronkowski has not ruled out returning to the NFL at some point, but he says he’s not in the mental place to return yet.
Italian Bank Unicredit Downsizes
The Italian banking system has long been a basket case, almost exclusively reliant on the European Central Bank to keep a nominal value on all the domestic government bonds the banking sector has bought since the peak of the Eurozone sovereign debt crisis in 2012. The doom loop potential is definitely there, but that isn’t keeping Unicredit (OTCQB:UNCFF) from spreading optimism after pledging to cut 8,000 jobs by 2023, by which time the Eurozone may no longer exist at all. Shares are down 97% since 2009, and 55% below its lowest point in 2012 when the Eurozone was on the verge of disintegrating absent the first ECB bailout in a long series of them ever since.
Damning 700-Page Report Implicates PG&E For Negligence
The California Public Utilities Commission, tasked with pointing fingers after tragedy has already struck, is pointing the finger at PG&E (NYSE:PCG) for systemic problems with how the utility monopoly oversaw the safety of its most rickety and aged lines. Since monopolies don’t have competition by definition, one would think that there would be systemic problems with this kind of setup as the lack of competition encourages laziness, generally speaking. PG&E equipment started the 2018 Camp Fire that killed 85 people, which PG&E readily admits by not disputing the accusation. The new report adds though that there were serious violations involved in maintaining the lines that started the fire. The company is alleged to have put off maintenance work on the Caribou-Palermo transmission line specifically.