Week of July 12 2019 Weekly Recap & The Week Ahead
” I learned early that there is nothing new in Wall Street. There can’t be because speculation is as old as the hills. Whatever happens in the stock market today has happened before and will happen again. I’ve never forgotten that.” –Jesse Livermore
1. Trump’s Rule Requiring ‘Drug Prices in TV Dds Blocked — U.S. District Judge Amit Mehta has blocked a Trump administration rule requiring drugmakers to put prices in TV ads, a central part of the president’s push to lower the cost of prescription medications. The rule of the Health and Human Services Department would violate free speech and exceeded the agency’s statutory authority, Mehta wrote, adding that “the responsibility rests with Congress to act in the first instance.” The lawsuit was brought by Merck (NYSE:MRK), Eli Lilly (NYSE:LLY) and Amgen (NASDAQ:AMGN), which have long argued that list prices do not reflect the actual cost of drugs as they do not take into account discounts and rebates negotiated with health insurers and PBMs.
2. Deutsche Bank Launches Makeover, Plans 18,000 Job Cuts — Deutsche Bank (NYSE:DB) is confirming a radical transformation, through a restructuring that will see it exit the global equities business and shed 18,000 jobs. The latest overhaul looks to charges of €7.4B through 2022, while it won’t pay a dividend this year or next. The German bank also expects to report a net loss of €2.8B for the second quarter, before it narrows its focus on serving European companies and retail-banking customers.
2. Fed Chairman Jerome Powell Sent a Strong Signal the Central Bank Could Cut Interest Rates Later This Month — In testimony before a House committee, Mr. Powell highlighted how the economic outlook hasn’t improved in recent weeks. He also warned of risks that weaker inflation readings could prove more persistent than previously anticipated. Mr. Powell will testify again today, this time in front of a Senate committee.
Stocks in the U.S. leapt after Mr. Powell’s testimony. The Nasdaq Composite closed at a record 8202.52. Energy and technology stocks led the S&P 500 higher as it briefly breached the 3000 level for the first time before ending the day at 2993.07.
3. Deutsche Bank is Being Investigated by the U.S. Justice Department — The U.S. Justice Department is investigating whether Deutsche Bank violated foreign corruption or anti-money-laundering laws in its work for 1Malaysia Development Bhd., which included helping it raise $1.2 billion in 2014 as concerns about the fund’s management and financials had begun to circulate.
“Deutsche Bank has cooperated fully with all regulatory and law-enforcement agencies that have made inquiries relating to 1MDB,” a spokesman for the bank said. He cited Justice Department documents saying 1MDB made “material misrepresentations and omissions to Deutsche Bank officials” in connection with 1MDB’s transactions with the bank. “This is consistent with the bank’s own findings in this matter,” he added.
4. President Voiced No Support for Bitcoin — “I am not a fan of Bitcoin (BTC-USD) and other cryptocurrencies, which are not money, and whose value is highly volatile and based on thin air,” President Trump tweeted last night. He also took a slap at Facebook (NASDAQ:FB) and its Libra crypto offering, which he said “will have little standing or dependability.” If Facebook and others want to become banks, he adds, they can stand in line and get banking charters like all the rest. “We have only one real currency in the USA, and it is stronger than ever, both dependable and reliable.”
The week ahead — Economic data from Econoday.com:
