“Amateurs think about how much money they can make. Professionals think about how much money they could lose.” – Jack Schwager

1. U.S. Proposed Sale from Strategic Oil Reserve to Reduce Global Oil Supplies — the U.S. Department of Energy is offering 11M barrels of crude for sale from the nation’s Strategic Petroleum Reserve ahead of sanctions on Iran that are expected to reduce global oil supplies and increase prices. The SPR was established in the 1970s after the U.S. economy was paralyzed by an oil embargo. As recently as 2011 it contained 727M barrels in caverns along the Texas and Louisiana coasts.
2. JPMorgan to Unveil New Investing App — JPMorgan (NYSE:JPM) is rolling out a digital investing service next week that comes bundled with free or discounted trades, a sophisticated portfolio-building tool and no-fee access to the bank’s stock research. “You Invest,” more than two years in the making, has a distinct advantage over many competitors: JPMorgan already has financial ties with half of American households.
3. Hospitals Shut At a Rate of 30 Annually — U.S. hospitals have been closing at a rate of about 30 a year, according to the American Hospital Association, and patients living far from major cities may be left with even fewer hospital choices as insurers push them toward online providers like Teladoc (NYSE:TDOC) and clinics such as CVS’s MinuteClinic (NYSE:CVS). The next year to 18 months could see a further increase in shutdowns, with the risks coming following years of mergers and acquisitions.
4. China Retaliates Against New U.S. Tariffs — a fresh round of U.S. tariffs on $16B worth of Chinese imports kicked in at last week, prompting Beijing to retaliate with its own levies on American goods worth the same amount. The world’s two largest economies, which are in the midst of trade talks, have now slapped tit-for-tat duties on a combined $100B of products since early July, with more in the pipeline. Economists reckon that every $100B of imports hit by tariffs would reduce global trade by around 0.5%.
5. SEC Dismisses More Bitcoin ETFs — the SEC has once again thwarted an attempt to build a bitcoin ETF, rejecting applications for nine separate bitcoin-based exchange-traded funds. Cboe Global Markets (NASDAQ:CBOE) and NYSE Arca (NYSE:ICE) would have listed the products. The commission leaned on the same reasoning as for the earlier rejections, mainly that there aren’t enough protections against fraud and market manipulations.
6. U.S.-China Trade Talks End with No Major Progress — Mid-level trade talks between the U.S. and China ended without any formal signs of progress, although Chinese officials said they plan to keep the lines of communication open. Sources indicated the two sides mainly swapped talking points without getting any detailed negotiations. Representatives from the U.S., European Union, and Japan plan to meet in Washington to extend talks on how to leverage the World Trade Organization and other ways pressure can be exerted on China.

The week ahead — Economic data from Econoday.com:

“The game of speculation is the most uniformly fascinating game in the world. But it is not a game for the stupid, the mentally lazy, the person of inferior emotional balance, or the get-rich-quick adventurer. They will die poor.” – Jesse Livermore

1. Turkey Retaliated With Tariffs on U.S. Cars, Alcohol, Tobacco — a reeling Turkey has responded to U.S. tariffs with retaliatory duties on U.S. passenger cars, alcohol, tobacco, cosmetics and other products. Tariffs on cars are set to rise by 120% and those on made-in-the-U.S. alcoholic drinks by 140%, alongside a 60% increase on tobacco products. The move comes amid increasing fears of contagion from Turkey’s collapse.
2. China, U.S. to Resume Trade Talks This Month — China will send a delegation to the United States later in August to resume trade talks that largely broke down a couple of months ago. Vice Commerce Minister Wang Shouwen will discuss economic and trade issues with U.S. counterpart David Malpass in a new attempt at defusing a trade war that has resulted in billions of dollars in tariffs so far, with threats of more. Formal talks between the U.S. and China broke down last month and led to dueling tariffs.
3. Amazon Eyes Online U.K. Healthcare Market — Major insurance firms in Europe have been invited by Amazon (NASDAQ:AMZN) to participate in a U.K. price comparison website. While there are no firm details on a launch by Amazon into financial services in the region, online insurance comparison players such as AXA (OTCQX:AXAHF), Hastings (OTC:HNGGF), Esure (OTC:ESXRY) and GoCompare are on watch.
4. Federal Probe Focuses On Apartment Mortgage Fraud — WSJ reported the investigation, still in its early stages, has so far resulted in a fraud-conspiracy indictment against four real-estate executives in upstate New York for falsifying information that helped them secure loans multi-family properties. The indictments made fraud-conspiracy charges against Todd Morgan and Kevin Morgan, a son and nephew of Robert Morgan, and charged their mortgage brokers, Frank Giacobbe and Patrick Ogiony of Aurora Capital Advisors. One owner of properties investigators reviewed is Robert C. Morgan, who ran a firm called Morgan Management LLC, but changed its name in June to Grand Atlas Property Management.
5. Q2 Latest Hedge Fund 13F — Hedge funds have finished up reporting on the investments they held at the end of Q2. New portfolio additions such as Keurig Dr Pepper (NYSE:KDP) by Citadel, Groupon (NASDAQ:GRPN) by Engaged Capital and GrubHub (NYSE:GRUB) by Jana Partners. Perhaps not a surprise, Alibaba (NYSE:BABA) was one of the names that cropped up the most times in the portfolio updates. Facebook (NASDAQ:FB) was added by at least six funds in Q2 as a new addition, while ten funds dropped the tech stock or trimmed exposure. In addition, Berkshire boosts stakes in Apple, US Bank, Teva, BNY Mellon, Delta in Q2 — in the latest 13F from Berkshire Hathaway (BRK.A, BRK.B) showed its stake in Apple (AAPL) as boosted to about 252M shares as of June 30 – up roughly 5% from three months earlier. The Oracle and company also added to holdings in U.S. Bancorp (NYSE:USB), Teva Pharmaceuticals (NYSE:TEVA), Bank of New York Mellon (NYSE:BK), General Motors (NYSE:GM), and Goldman Sachs (NYSE:GS). Among those showing trimmed stakes were American Airlines (NASDAQ:AAL), Phillips 66 (NYSE:PSX), Charter Communications (NASDAQ:CHTR), and Wells Fargo (NYSE:WFC).
6. U.S. Seen Near Deal with Mexico On Revised NAFTA But Canada Remains Apart — the U.S. is close to reaching a deal with Mexico on a revamped North American Free Trade Agreement, but thorny issues are yet to be resolved with Canada, according to reports. Both Mexico and the U.S. are seen as having strong incentives to push through a deal quickly: Mexico wants to lock in an agreement before its new leftist president takes office, and the Trump administration wants a win on trade ahead of the midterm elections. U.S. negotiators this week have been meeting with senior Mexican officials in Washington, and the two sides are said to have largely agreed to new rules on auto trade – a top White House priority – that could boost investment in the U.S. President Trump says he is “in no hurry” to complete a NAFTA deal, remarks seen mostly as an attempt to put pressure on Canada.

The week ahead — Economic data from Econoday.com:

“The markets are always changing, and the successful trader needs to adapt to these changes” — Michael Steinhardt

1. U.S. Reimposes Sanctions on Iran — the first batch of American sanctions on Iran has come into effect, 90 days after the U.S. withdrew from the nuclear deal. The new measures bar the sale of U.S. currency to Iran’s government, sanction trade in precious metals and industrial materials, outlaw the purchase of Iran’s sovereign debt, and restrict the country’s auto and aerospace sector. Unless Iran complies with the U.S. demands, far-tougher steps will take effect on Nov. 5, when the U.S. will cut off Iran’s oil exports and impose sanctions on shipping.
2. China Outspent the U.S. in 5G — since 2015, China has outspent the U.S. by $24B in 5G infrastructure, potentially creating a “tsunami” that will be difficult to catch up with, according to a new study by Deloitte. China has built 350,000 new cell sites, while the U.S. has built fewer than 30,000 in the same time frame. 5G would support connected infrastructure in cities, including driverless cars, and make it possible for people to stream high-bandwidth video.
3. SEC Delayed Decision & Bitcoin Crashes Under $6,500 — the crypto reaching as high as $8,496 in July, but its latest descent has seen the digital currency fall overnight to under $6,500. The move was accelerated after the SEC pushed back an eagerly-awaited decision on the SolidX Bitcoin ETF (XBTC), sponsored by SolidX Management with marketing assistance from Van Eck Securities. A verdict is now expected by the end of September.
4. U.S.-Japan Enters New Trade Talks — Japan and the U.S. are headed for a new round of trade talks today in Washington. Economic Revitalization Minister Toshimitsu Motegi will try to avert steep tariffs on car exports and stress the significance of multilateral free trade, with an eye on persuading the U.S. to return to the TPP. The world’s third-largest economy will also face demands from U.S. Trade Representative Robert Lighthizer, including a trade deficit reduction and the further opening of Japan’s automobile and agriculture markets.
5. Turkish Crisis Rattles Global Markets Amid Escalating Spat With U.S. — the lira dropped as much as 25% against the dollar, extending a tumble that ranks as one of the steepest in world markets this year. Turkey’s problems are spilling over into the greater market following reports that the ECB is concerned over the impact of a weak lira on European banks, especially BBVA, UniCredit (OTCPK:UNCFF), and BNP Paribas (OTCQX:BNPQF). Data from the BIS also showed the currency, which plunged 13.5% overnight to an all-time low against the dollar, will weigh on banking exposure internationally.

The week ahead — Economic data from Econoday.com:

“Focus, patience, wise discernment, non-attachment —the skills you acquire in meditation and the skills you need to thrive in trading are one and the same.” — unknown

1. Iran’s Rial Hits Record Low — Iran’s currency hit a historic low of 100,000 rials to the dollar over the weekend. The collapse, which has seen the currency lose half its value in just four months, was encouraged by a deepening economic crisis and the imminent return of full U.S. sanctions. The penalties will be reimposed in two stages on Aug. 6 and Nov. 4, forcing many foreign firms to sever business ties with Tehran.
2. Japan, U.S., Australia Plan Infrastructure Push in Asia — forming a trilateral partnership, Australia and Japan have joined the U.S. in a push to invest in infrastructure projects in the Indo-Pacific region as China spends billions of dollars on its Belt and Road initiative across Asia. The investments will include energy, transportation, tourism and technology infrastructure, with the governments aiming to attract private capital to projects.
3. U.S.-China Trade War Back in Focus — the two countries are seeking to resume talks to defuse a tariff battle, according to Bloomberg, although later reports suggested the Trump administration plans to propose tariffs of 25% on $200B of imported Chinese goods after initially setting them at 10%. The Caixin-Markit PMI overnight also showed China’s manufacturing sector growing at its slowest pace in eight months in July, dragged down by declining export orders.
4. Molson Coors Canada and Hydropothecary Announces a Joint Venture — the Canadian unit of Molson Coors (NYSE:TAP) has entered a deal that will allow it to develop cannabis-infused beverages in the Great White North. It’s teaming up with Canadian cannabis producer Hydropothecary (OTCPK:HYYDF) to “participate in this exciting and rapidly expanding consumer segment.” Marijuana use in Canada will become legal later this year.
5. China Dethroned By Japan As World’s No. 2 Stock Market — an intensifying trade spat with the U.S. just led China to cede its four-year title as the world’s second-largest stock market to Japan. After a last week slump, Chinese equities were valued at US$6.09T, losing out to Japan’s $6.17T, while the U.S. remains the world’s largest with a market cap of $31T. The Shanghai Composite Index has lost more than 16% YTD to be among the world’s worst performers, while the yuan has fallen 5.3% against the dollar.
6. Apple Market Cap Over $1T — Apple hit a market cap of $1T last week, becoming the first publicly traded U.S. company to reach the milestone. Many credit the company’s growing software and services sales with driving the valuation. The catch-all category – which includes the App Store (NASDAQ:AAPL), AppleCare, Apple Pay, iTunes and cloud services – posted record revenue of $9.55B for the June quarter.

The week ahead — Economic data from Econoday.com: