Week of Aug 26 2016 Weekly Recap & The Week Ahead
Two rules for investing/trading:
Rule number one : most things will prove to be cyclical
Rule number two : some of the greatest opportunities for gain and loss come when other people forget rule number one — Howard Marks
1. US New Home Sales Race To Near 9-Year High in July — the Commerce Department reported new home sales surged 12.4 percent to a seasonally adjusted annual rate of 654,000 units last month, the highest level since October 2007. Residential construction was a minor drag on economic growth in the second quarter. Housing market strength, marked by rising home values which are boosting household wealth, is helping to buoy consumer spending, cushioning the blow on the economy from a downturn in business spending as well an inventory correction.
2. Delphi Automotive and Mobileye to Partner In Self-Driving Car Push — key driving partnership between Delphi Automotive (NYSE:DLPH) and Mobileye (NYSE:MBLY) to be a leader in Self-Driving Car. The two auto suppliers want to pool investment and execution risk amid the rapidly developing self-driving car push in the industry.
3. Senate Judiciary Committee To Hold Hearing on Ag-Chemical Merger Deals — the U.S. Senate Judiciary Committee plans to hold a hearing in late September to discuss the merger of Dow Chemical (NYSE:DOW) and DuPont (NYSE:DD), and ChemChina’s purchase of Syngenta (NYSE:SYT). Committee Chair Senator Grassley of Iowa has expressed concern that the deals would result in farmers paying more for seeds, pesticides and herbicides, and reduce the companies’ incentive to innovate. However, the committee has no formal say over whether the deals can go forward; the Justice Department is reviewing the Dow-DuPont merger, while the FTC is looking at ChemChina’s purchase of Syngenta.
4. House Republican To Propose New Tax Rule for Internet Commerce — a leading House Republican plans to introduce a proposal over how to tax inter-state Internet transactions. Bob Goodlatte wants the rules affecting a transaction to be based on where the retailer is located but the tax rate to be set by the consumer’s state. For example, an Ohio company selling a pair of trousers to a buyer in Maryland would use Ohio’s regulations for taxing clothing and Maryland’s tax rate. This contrasts with the current rules in which a sale is taxed only if the seller has a physical presence in the shopper’s state.
5. Fed’s Yellen Sees Stronger Case for Interest-Rate Rise — Federal Reserve Chairwoman Janet Yellen said the case for another interest-rate hike is strengthening, sending a strong signal the U.S. central bank is preparing to increase rates as soon as next month. She stated “In light of the continued solid performance of the labor market and our outlook for economic activity and inflation, I believe the case for an increase in the federal-funds rate has strengthened in recent months,”.
The week ahead — Economic data from Econoday.com:
