Week of Oct 19 2018 Weekly Recap & The Week Ahead
“I believe in analysis and not forecasting.” — Nicolas Darvas
1. Sears Files for Chapter 11 Bankruptcy — Sears has filed for bankruptcy after years of staying afloat through financial maneuvering, a merger with Kmart and relying on billions of CEO Eddie Lampert’s own money. It’s set to shutter 142 stores towards the end of the year and begin liquidation sales shortly. While Lampert will step down as CEO, he’ll remain Sears (NASDAQ:SHLD) chairman, as his ESL Investments negotiates a debtor in possession loan and other funding to support what was once the country’s biggest retailer through the bankruptcy process.
2. Italy Endorses Deficit-Hiking Budget — Italy’s government signed off on an expansionary 2019 budget late Monday – with planned measures that would boost welfare spending, lower the retirement age and cut taxes – in defiance of EU rules that require a shrinking deficit. The draft budget law has rattled financial markets in the past month, with investors demanding significantly higher interest rates to buy Italian bonds.
3. Fidelity Starts Crypto Unit — Fidelity Investments is getting into the crypto scene with a new unit called Fidelity Digital Assets Services. “Our goal is to make digitally-native assets, such as bitcoin, more accessible to investors,” announced CEO Abigail P. Johnson. “We expect to continue investing and experimenting, over the long-term, with ways to make this emerging asset class easier for our clients to understand and use.”
4. U.S. to Open Trade Talks with EU, UK, Japan — Just weeks after the retooling of NAFTA, the U.S. Trade Representative’s office has informed Congress it intends to open trade talks with the EU, U.K. and Japan, aiming to “address both tariff and non-tariff barriers and to achieve fairer, more balanced trade.” Under fast-track rules, the U.S. cannot start trade talks until 90 days after notifying Congress.
5. Canada Legalizes Marijuana Nationwide — Canada begins legalization of recreational marijuana sales in Canada, with provinces handling their own regulations for sale, growth and taxation. Adults will be allowed to carry and share up to 30 grams of legal marijuana in public, cultivate up to four plants in their households and make products such as edibles for personal use. Canadians can also order weed through the mail. Companies related are — TLRY, CRON, CGC, MJ
6. Fed Minutes Point to Continued, Gradual Interest-Rate Increases — the latest Fed minutes shows officials voted unanimously at the September meeting to raise their benchmark rate to a range between 2% and 2.25%. Projections released after the meeting show most officials expected they would need to raise rates one more time this year and around three times in 2019 if the economy performs in line with current forecasts.
The week ahead — Economic data from Econoday.com:
