Week of July 26 2019 Weekly Recap & The Week Ahead
”Money cannot consistently be made trading every day or every week during the year” — Jesse Livermore
1. Brexit Leader Boris Johnson Wins Race for UK Prime Minister — Boris Johnson, the former foreign secretary and mayor of London who has pledged to take Britain out of the European Union on Oct. 31, is set to become British prime minister after winning the leadership of the ruling Conservative Party. His anointment will herald a period of intense political and economic uncertainty for the U.K., with the prospect of a sudden break from the EU and questions about how long his minority government will last.
2. Congress Moves Toward Ban on Buying Chinese Buses, Railcars Over Spy Fears — China’s push to gain a bigger foothold in U.S. public transit systems could derail in Congress, which is moving to bar use of federal funds to buy Chinese buses and railcars. The effort threatens to further fray trade talks with China, which wants to become a global player in transport and is already fuming over the U.S. decision to blacklist telecommunications giant Huawei Technologies Co. The U.S. House of Representatives passed its version of an annual defense-policy bill July 12 with language blocking transit agencies from using federal money to buy railcars made by Chinese state-owned, -controlled or -subsidized companies.
3. UPS to Join FedEx in Starting Seven-Day Delivery; Launches Drone Business — United Parcel Service (NYSE:UPS) will start delivering packages on Sundays starting in January, following FedEx’s (NYSE:FDX) announced move to seven-day delivery as the two work to meet the demands of online shopping. UPS also announced a new drone delivery subsidiary called UPS Flight Forward and said it has applied for FAA certifications needed to expand the business. Those would allow drone flights beyond an operator’s visual line of sight, at night and without limit to the number of drones or operators in command.
4. SK Hynix Cutting DRAM Production, NAND Input — SK Hynix (OTC:HXSCF,OTC:HXSCL) plans to cut its DRAM production capacity from Q4 due to the demand environment and tech migration. The company will also reduce its NAND wafer input by more than 15%, up from its previous plans to cut input 10% compared to last year. Competitors in these spaces include Micron (NASDAQ:MU), Intel (NASDAQ:INTC), and Western Digital (NASDAQ:WDC).
5. ECB Signals Rate Cut, Possible Stimulus Relaunch — the European Central Bank signaled it is preparing to cut short-term interest rates for the first time since early 2016 and possibly restart its giant bond-buying program. The ECB said in a statement Thursday that it expects to keep its key interest rate at its current level of minus 0.4% or lower through the first half of 2020, a clear signal that it is planning a rate cut.
The economic outlook “is getting worse and worse,” especially in manufacturing, ECB President Mario Draghi said at a press conference. “Basically we don’t like what we see on the inflation front.”
The week ahead — Economic data from Econoday.com:
