Week of Sept 25 2015 Weekly Recap & The Week Ahead
“when the facts change, you must change your mind” — unknown
1. Volkswagen Admitting Diesel Emissions Cheat — Volkswagen (OTCQX:VLKAY) admitted to cheating on U.S. air pollution tests for years, risking billions in potential fines and heavily shaking investor confidence. Shares in Frankfurt plunged as much as 22% on the news, the steepest intraday decline in almost seven years, wiping out $18B in market value and extending the stock’s slump for the year to 32%. “I personally am deeply sorry that we have broken the trust of our customers and the public,” Volkswagen (OTCQX:VLKAY) CEO Martin Winterkorn said in a statement.
2. Alibaba’s $105B Lockup Comes to An End — the lockup on 63% of Alibaba (BABA) shares ended on Sept 19, freeing up the company’s largest shareholders to start selling stock beginning today. With Yahoo (NASDAQ:YHOO) still working out what to do with its 15% stake amid tax uncertainties, investors battered by the e-commerce company’s $128.5B market slump are bracing for the worst, such as more shares hitting the market and driving prices even lower.
3. The Democratic Front-Runner, Hillary Clinton Drug Plan Would Cap Consumer Costs, Mandate R&D Spending — Several details of the new plan have emerged. The plan would put a $250 monthly cap on the amount chronic pain patients would have to pay for prescription medications, approving more generic/imported drugs, forcing pharmaceutical companies to reinvest their profits into R&D, and ending their ability to write off consumer advertising as a business expense.
4. China Factory PMI Falls Again — activity in China’s factory sector fell to the lowest level in over six years. The preliminary Caixin China manufacturing purchasing managers’ index dropped to 47.0 in September, compared to the 47.5 reading expected by economists. The index came in at 47.3 in August. The decline was led by a weak read for new orders and new export orders.
5. House Speaker John Boehner To Resign From Congress — House Speaker John Boehner will leave Congress next month, an aide said on Sept 25, in a stunning shakeup of Republican leadership in Washington. Boehner has been embroiled in a fight with the conservative wing of his party as the federal government hurtles toward a possible shutdown next week. Congress has passed no funding bills for the fiscal year that begins Oct. 1, and without a stopgap bill, the government would partially shut down. There had been talk by conservatives of replacing Boehner as speaker.
The week ahead — Economic data from Econoday.com:
