Week of July 28 2017 Weekly Recap & The Week Ahead
“I have learned through the years that after a good run of profits in the markets, it`s very important to take a few days off as a reward. The natural tendency is to keep pushing until the streak ends. But experience has taught me that a rest in the middle of the streak can often extend it.”– Martin Schwartz
1. Trump Support Russia Sanctions Legislation — Congressional leaders have reached an agreement on a set of sweeping sanctions against Russia as punishment for interference in the 2016 U.S. election, engagement in Syria and the annexation of Crimea. Press Secretary Sarah Huckabee Sanders indicated Pres. Trump likely would support the bill, saying that original sanctions legislation “was poorly written but… we support where the legislation is now.” Meanwhile, the European Union could retaliate against U.S. sanctions on Russia, worried about potential harm to European energy deals.
2. Obamacare Repeal Fails in Senate — a plan to repeal and replace Obamacare that Senate Republicans have been working on for months failed to get the 60 votes needed for approval. The tally came out to 43 in favor and 57 against, with nine Republicans voting against the measure. It’s the first of many expected votes this week following the return of John McCain, who has been recovering from recent brain surgery.
3. U.K. to Ban Gas Vehicles from 2040 — Britain is set to ban all new gas and diesel vehicles from 2040 amid fears that rising levels of nitrogen oxide pose a major risk to public health. The commitment, which follows a similar pledge in France, is part of the government’s clean air plan, which has been at the heart of a protracted high court legal battle.
4. Dollar Index Hit by Fed statement — the dollar index has fallen to its lowest level in over a year after the Fed signaled its balance sheet reduction would be starting soon. The central bank kept rates on hold and made no changes to its overall policy, but the statement following its July meeting said balance sheet normalization would start “relatively soon”.
5. Border Adjustment Tax Abandoned — Republican leaders have also abandoned the idea of a border adjustment tax, as part of an effort to present a united front for a broad tax overhaul. “While we have debated the pro-growth benefits of border adjustability, we appreciate that there are many unknowns associated with it,” Steven Mnuchin, Paul Ryan and Mitch McConnell said in a statement.
6. Tobacco Shares Plunge After FDA Proposes Cut to Cigarette Nicotine — the U.S. Food and Drug Administration plans to explore regulating the level of nicotine in conventional cigarettes, a radical step that would reshape the $130 billion American tobacco industry. The move would represent one of the most sweeping federal efforts to reduce smoking since Congress required cigarette packages to carry health warnings in 1965. It follows other moves by President Donald Trump’s FDA Commissioner Scott Gottlieb to try and deal with the high cost of prescription drugs and opioid addiction. Companies effected are stock of cigarette producers including British American Tobacco (BTI), Altria Group (MO) and Philip Morris International (PM).
The week ahead — Economic data from Econoday.com:
