Week of Mar 2 2018 Weekly Recap & The Week Ahead
“We learn from history that we do not learn from history,” — George Wilhelm Friedrich Hege
1. Apple is Launching Medical Clinics — Apple is launching a group of medical clinics called AC Wellness to deliver the “world’s best healthcare experience” to its employees and their families, CNBC reports. A quietly published website, acwellness.com, said the Apple (NASDAQ:AAPL) initiative will begin this spring. The news comes as Amazon announced an effort with Berkshire Hathaway (BRK.A, BRK.B) and JPMorgan (NYSE:JPM) to improve the healthcare of their employees.
2. GE to Restate Two Years of Earnings — General Electric plans to restate the last two years of corporate profits, resulting in a cut of $0.13 in reported earnings per share for 2016 and $0.16 per share for 2017. The reduction comes as the conglomerate adopts new accounting standards for recognizing revenue from long-term contracts amid an SEC investigation into the method. GE will make the restatements on April 20.
3. U.S. to Imposed Heavy Duties on Aluminum Foil from China — the U.S. Commerce Department has imposed duties as high as 106% on aluminum foil from China after concluding that the country’s producers are dumping the product in the U.S. and receiving unfair government subsidies. In response, China’s Ministry of Commerce expressed “strong dissatisfaction” with the action and will take necessary measures to protect its legal rights and interests.
4. Energy ETF Closes February with Worst Monthly Drop Since December 2015 — the largest energy ETF (XLE) fell 10.8% for February, its worst monthly showing since December 2015. Prices for the April WTI contract settled 4.8% lower in February, the first monthly loss since August, while Brent crude fell 4.7% for the month in its first monthly loss since June. Also, Sundial Capital Research’s Jason Goepfert notes that “this is the first time since December 2015 that the S&P 500 has gained 1% or more for two straight days only to drop 1% or more on each of the next two days. That doesn’t happen very often, just 23 times since 1928. Here’s the rub: “All but 3 of them occurred during bear markets,” Goepfert writes. “Because it tended to occur in downtrends, future returns were poor, with declines over the next 30 days 65% of the time averaging -1.9%,” Goepfert writes.
5. SEC Launches Sweeping Probe Into Cryptocurrencies — the SEC has issued scores of subpoenas and information requests in a sweeping probe of technology companies and advisers involved in the booming market for digital tokens, the Wall Street Journal reports. The investigation significantly ratchets up the regulatory pressure on the booming U.S. market for raising funds in cryptocurrencies. Coin offerings raised $6.5B in 2017 and more than $1.6B so far this year despite a crash in the price of Bitcoin and other cryptocurrencies.
6. Trump’s Announcement Tariffs on Steel and Aluminum — Trump plans to impose tariffs of 25 percent on steel imports and 10 percent on aluminum. However, he didn’t elaborate on the details, saying the formal announcement will come next week. The EU said that it could target imports of Harley Davidson Inc. motorbikes, Levi Strauss & Co. jeans and bourbon whiskey as part of its response. Many nations are making a last-ditch attempt to have their nation’s steel and aluminum exempt from the action, a targeted strategy the U.S. Defense Department had voiced support for. Meanwhile, Canadian and Brazilian steel comprised a respective 16% and 13% of U.S. steel imports as of September 2017, while China, frequently criticized politically for dumping cheap steel on trade partners, is not one of the top 10 exporters of steel to the U.S., the report said. Meanwhile, top foreign sources of aluminum during 2013-16 included Canada (56%), Russia (8%) and the United Arab Emirates (7%).
The week ahead — Economic data from Econoday.com:
