Trump Helps China, HSBC Goes Blockchain, Sadr Wins Iraq, Xerox Breaks up With Fujifilm

Stock Market Roundup

Clear Skies Ahead…For the Next Few Minutes At Least

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Futures are up this morning, and the positive action is being attributed to a President Trump tweet indicated that he is working together with President Xi of China on bailing out a very big Chinese phone company called ZTE. This sudden concern for the Chinese unemployment rate is making many market actors believe that the show of support means that a trade deal will be worked out amidst all the squabbles and arguments about trade deficits. S&P 500 futures (NYSEARCA:SPY) are up 0.21%, and the Nasdaq is up 0.31% for now.

HSBC Bank Goes Totally Blockchain With Soybeans in Malaysia

Soybeans have just moved from Argentina to Malaysia, not a very exciting piece of news except for the fact that the transaction was recorded on a blockchain ledger under the auspices of HSBC Holdings (NYSE:HSBC) and ING Bank using Corda, a blockchain software for businesses. Much like Uber is cutting into taxis, and Airbnb is cutting into hotel revenues, expect blockchain to cut into the revenues of whoever made money off of traditional record-keeping services that will likely be gradually phased out as blockchain takes over the ledger business.

Oops! Enemy of U.S. Wins Iraqi Elections

Muqtada al Sadr, an Iraqi Shiite imam who has led two uprisings against U.S. troops in Iraq after George W. Bush invaded the country 15 years ago on the justification that then president Saddam Hussein was hiding weapons of mass destruction which turned out to be false, has won the Iraqi elections, a process that exists thanks to U.S. action in Iraq. As if this weren’t convoluted enough,  Sadr is an enemy of both the United States and Iran, both countries he wants nothing to do with. Will Sadr ultimately align himself with the U.S. against Iran, or with Iran against the U.S., or both and pit one against the other, or neither and mind his own business? Tune in over the next few years to find out.

Xerox Declares Independence From Fujifilm

Xerox Corporation (NYSE:XRX) is down over 4% in premarket trading as a $6.1 billion deal between itself and Japanese firm Fujifilm has fallen through. The deal was axed with the encouragement of Carl Icahn and Darwin Deason, two activist investors who together own a 15% stake in Xerox and who were convinced that a better deal could be gotten and that Xerox was worth more than what Fujifilm was offering. Traders aren’t so certain, given that Xerox stock has tanked on the news. The company has been in decline since the 20th century, and has never recovered its past glory ever since the dot com bubble at the turn of the millennium.

Monetary  Maven Mester Moves Markets, Minds

Fed President Loretta Mester, who has a vote on the Federal Open Market Committee on interest rates, in a speech in Paris to other central bankers, has said that she does not expect inflation to pick up sharply, and so everything is fine and the Fed can keep gradually raising rates. Interestingly, she hinted that a 2% target may no longer be an appropriate monetary policy goal, perhaps hinting that raising that target should be considered.

“Now is the time to assess whether changes to our current framework could make monetary policy more effective in achieving our goals,” she said.

How much purchasing power per year are people supposed to lose? This is a question that only central bankers have the answer to, because they know this stuff cold, which is why they’re always changing their minds in a data-dependent manner.


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