Week of May 10 2019 Weekly Recap & The Week Ahead
“Markets are constantly in a state of uncertainty and flux and money is made by discounting the obvious and betting on the unexpected.” — George Soros
1. Walmart Pushes Veterinary Clinic — with spending on pets in the U.S. estimated to exceed $75.3B this year, Walmart (NYSE:WMT) aims to have 100 veterinary clinics open in its stores within the next 12 months, growing from the 21 it has today. The retailer is also for the first time launching an online pet pharmacy, WalmartPetRX.com, rivaling Chewy.com. Walmart has seen a roughly 60% increase in the number of dog- and cat-related health-care items sold on its website over the past year, according to a company spokeswoman.
2. China Hardens Trade Stance as Talks Enter New Phase — the new hard line taken by China in trade talks—surprising the White House and threatening to derail negotiations—came after Beijing interpreted recent statements and actions by President Trump as a sign the U.S. was ready to make concessions, said people familiar with the thinking of the Chinese side. Adding to the pressure, the U.S. formally filed paperwork Wednesday to raise tariffs on $200 billion of Chinese goods to 25% from the current 10% at 12:01 a.m. Friday. Beijing’s Commerce Ministry responded by threatening to take unspecified countermeasures. At a campaign rally in Florida Wednesday night, Mr. Trump said Chinese leaders “broke the deal” in trade talks with the U.S.
3. BlackRock Pulls Out of Italian Bank Banca Carige Rescue — BlackRock’s (NYSE:BLK) withdrawal from the proposed deal increases the possibility that the Italian government may have to bail out Banca Carige (OTC:BCIGY). BlackRock, which was to have bought about half a 720M euro ($806M) share issue, rejected the proposed deal for reasons including excessive risk. The deal would have given BlackRock control of Italy’s 10th-largest bank.
4. Iran Begins Withdrawal from Nuclear Deal — a year after the U.S. pulled out of the Iran nuclear accord, Tehran declared it’s no longer committed to parts of the deal. President Hassan Rouhani said the remaining signatories – the U.K., France, Germany, China and Russia – had 60 days to implement their promises to protect Iran’s oil and banking sectors, giving them a choice of following President Trump or engaging with the Islamic Republic in violation of American sanctions. Iran will also begin to build up its stockpiles of low enriched uranium and heavy water, and threatened to resume construction of the Arak nuclear reactor.
5. U.S. Hits China with Tariff Increase — President Trump’s tariff increase on $200B worth of Chinese goods took effect last Friday after midnight. China’s Commerce Ministry immediately announced it would take countermeasures against the American move, but did not reveal what its response would entail. President Trump is already taking steps to impose a fresh round of tariffs on $325B in Chinese goods that aren’t currently taxed. If that happens, virtually all Chinese exports to the U.S. would face 25% tariffs, further ratcheting up tensions between the world’s two largest economies.
The week ahead — Economic data from Econoday.com:
