It turns out during the recent U.S./China battle the trade to have made was to buy bonds such as Vanguard GNMA. Yesterday, when the Dow fell 600 points, or 2.38%, and the tech-stuffed NASDAQ cratered (3.41%), Vanguard GNMA was up. Not a lot. But it made money nonetheless. The sooner you install a counterbalanced strategy with your hard-earned money, the more comfortable you’ll feel in times like these. The key to enjoying the retirement you deserve is to understand that markets can become violent, and when they do, bonds can be your best defense. Originally posted on … [Read more...]
Could an EU-US Free Trade Deal Happen in 2019?
The economies of the European Union and the United States are the largest in the world. A free trade agreement between the two would create the largest free trade bloc in history. Reuters' journalist Philip Blenkinsop reports that European Trade Commissioner Cecilia Malmstrom suggests a deal could be done by the end of this year. He writes: BRUSSELS (Reuters) - The European Union is ready to starts talks on a trade agreement with the United States and could conclude a deal before the end of the year, European Trade Commissioner Cecilia Malmstrom said on Monday. Malmstrom spoke after EU … [Read more...]
Is Chinese Manufacturing Hurting from the Trade-War?
A closely followed measure Chinese manufacturing industry's health has signaled its first contraction since mid-2017. The news sent stocks in Asia and Europe tumbling, along with American futures prices. Bloomberg's Jana Randow reports on trade tensions and manufacturing around the world, writing: Growth in the world’s largest economies is set to slow this year. Ongoing trade tensions between the U.S. and China are hurting demand across Asia’s manufacturing hubs and export-oriented European economies including Germany. Political uncertainty is weighing on confidence, while the U.S. government … [Read more...]
Will Parliament Accept May’s Deal with the EU?
The government of British Prime Minister Theresa May has signed a Brexit deal with the EU. Now May will try to get the deal through the U.K. Parliament, which must agree in order for the Brexit process to move forward. Max Colchester and Laurence Norman report at The Wall Street Journal: European Union leaders approved on Sunday a treaty outlining divorce terms with the U.K., a milestone in Britain’s bid to extract itself from the bloc that now leaves Prime Minister Theresa May with a tough task selling the deal to skeptical lawmakers in Parliament. Since Britons voted to break from the EU … [Read more...]
What Will Happen if Trump Increases Tariffs on China?
This week President Trump said it would be “highly unlikely” that he would hold off on increasing many tariffs on Chinese goods from 10% to 25%. Analysts are asking, what will happen if he goes forward with his plan? The media is answering that question with a spectrum of possibilities ranging from apocalypse to Armageddon. But what happens if Trump doesn’t take a tough stance with China? What is China’s endgame? And, if China is successful in implementing its plans via unfair trade practices, would the potential outcome be any better for the U.S. economy than the negative aspects of a … [Read more...]
McDonald’s: “One of the Most Russian Companies There Is”
In a world in which sanctions and tariffs are becoming regular responses to disagreements between countries, multi-nationals like McDonald's have to toe a fine line. Upsetting business in a foreign market that has become lucrative could have a major impact on results. In Russia, McDonald's is reassuring citizens that it's very much a "local" business. Thomas Grove reports in The Wall Street Journal: MOSCOW— McDonald’s Corp. became a leading ambassador of American culture after opening its first restaurant here in the twilight of the Soviet Union. Now, as Russia-U.S. tensions rise and … [Read more...]
Why the U.S. Can Beat China in a Trade War
Though it won’t be pain-free, if U.S. / China trade relations continue to devolve, it is the U.S. that is likely to come out on top. America’s multinationals are already engaging in contingency planning in the event of further tariff increases. Bloomberg News reports: Earnings reporting season is underway, and analysts are eager to hear from executives about how an escalating trade war between the U.S. and China is impacting their businesses. A common theme is that they are ready to relocate supply chains if the cost of importing Chinese goods becomes prohibitive. U.S. President Donald … [Read more...]
Can China Restore Confidence in the Heat of a Trade War?
China's economy is slowing down, with GDP growth at 6.5% in third quarter. That's the lowest rate since 2009. The question for Chinese policy makers is whether or not they can restore market confidence in the face of a trade war with the United States. Lingling Wei reports in The Wall Street Journal: Restoring market confidence is proving to be one of the toughest economic challenges for China’s leadership. Soon after the financial mandarins’ remarks were released, the official Xinhua News Agency published an interview with Vice Premier Liu He, President Xi Jinping’s economic captain, in … [Read more...]
China Asks Wall Street How to Reform its Laws
China wants to know what Wall Street thinks it should do to foster better ties with U.S. business. The country's leaders sent invitations to Wall Street firms to join a summit chaired by former governor of the People’s Bank of China Zhou Xiaochuan, and ex-president of Goldman Sachs, John Thornton. The summit is set to look at specific solution, not merely boilerplate platitudes about "working together." Reuters reports: Attendees will also meet with Chinese vice-president Wang Qishan on Monday morning after the full-day Sunday session, according to an invitation reviewed by Reuters. Zhou … [Read more...]
Is Canada About to Break in NAFTA Talks?
Reuters reports that Canada may be about to offer concessions to the United States on dairy imports to get NAFTA moving forward. This would be a big change in posture for the Canadians and a win for the Trump administration. The pressure is on the Canadian side as the U.S. and Mexico have already agreed to a deal. David Ljunggren and David Lawder write for Reuters: Canada is ready to offer the United States limited access to the Canadian dairy market as a concession in negotiations to rework the North American Free Trade Agreement, two Canadian sources with direct knowledge of Ottawa’s … [Read more...]