Week of Apr 20 2018 Weekly Recap & The Week Ahead
“Twenty years from now, you will be more disappointed by the things that you didn’t do than by the ones you did do, so throw off the bowlines, sail away from safe harbor, catch the trade winds in your sails. Explore, Dream, Discover.” – Mark Twain
1. NAFTA Deal Seen Within Weeks — On the sidelines of the Summit of the Americas, Mexican President Enrique Pena Nieto, U.S. Vice President Mike Pence and Canadian Prime Minister Justin Trudeau said they thought a renegotiated NAFTA deal could be reached before Mexican elections on July 1, although they cautioned no deadlines had been set. Pence also revealed that the topic of funding for President Trump’s proposed border wall did not come up at the conference.
2. China Reports GDP Growth of 6.8% in Q1 — China’s economy grew 6.8% in the first quarter of 2018, despite widespread concerns about financial risks amid a government-led economic restructuring. “The U.S.-China trade friction can’t beat the Chinese economy,” added Xing Zhihong, a spokesman at the National Bureau of Statistics, as China slapped a hefty temporary deposit on imports of U.S. sorghum.
3. Investors Wary of Potential for Inverted Yield Curve — the yield curve from five to 30 years continued to flatten last week to as little as 29 basis points, the narrowest spread since 2007, and the gap between the two-year yield and the 10-year yield touched 41 basis points, also the smallest since before the financial crisis. A truly inverted curve “is a powerful signal of recessions” that historically has occurred “when the Fed is in a tightening cycle, and markets lose confidence in the economic outlook,” John Williams, the next president of the New York Fed, said this week, although he maintained that is not the case now. The tightening yield spread is raising concerns among investors and Fed officials, as the phenomenon has sometimes indicated a weakening longer-term outlook for U.S. economic growth and inflation.
4. EpiPen Shortage Plagues Canada – amid a growing shortage that has spared the U.S., Canada is working with the FDA to access supplies of Mylan’s (NASDAQ:MYL) EpiPen. The allergy antidote is made at a single Pfizer (NYSE:PFE) unit near St. Louis, Missouri, but it has been recently hit by manufacturing problems. According to Health Canada, four companies have authorization to sell epinephrine auto-injectors, but none are currently marketing them in the country.
5. U.S. Mulls Emergency Law on Chinese Investment — the U.S. Treasury Department is considering using an emergency law to curb Chinese investments in sensitive technologies as the Trump administration looks to punish China for what it sees as violations of American intellectual property rights. A law may be used known as the International Emergency Economic Powers Act, passed in 1977, which could affect foreign investment in industries like semiconductors and 5G.
The week ahead — Economic data from Econoday.com:
Tags: NAFTA