Week of June 8 2018 Weekly Recap & The Week Ahead
“The secret to being successful from a trading perspective is to have an indefatigable and an undying and unquenchable thirst for information and knowledge.” — Paul Tudor Jones
1. China Launches Foreign Chipmaker Probe — Chinese regulators are investigating Micron Technology (NASDAQ:MU), Samsung Electronics (OTC:SSNLF) and SK Hynix (OTC:HXSCL) as the country tries to reduce dependency on foreign chips, WSJ reported. Some speculate the probe concerns the rising cost of DRAM chips – the three companies are dominant suppliers – or it might be seeking to use the current DRAM pricing environment to gain leverage for a technology transfer. Also, ZTE has signed an agreement in principle that would lift a U.S. Commerce Department ban on buying from American suppliers, sources told Reuters. The preliminary deal includes a $1B fine, plus $361 from an earlier settlement and $400M in escrow to cover any future violations
2. Primaries Shape Battle for Congress In Mid-Term Election — the battle for control of Congress is on the radar as voters across eight states choose nominees in a slew of hotly contested primaries. The California races have garnered the most attention because of that state’s open primary system, in which the top two vote-getters advance regardless of party affiliation. An oversupply of Democratic candidates could result in a splintered electorate, allowing two Republicans to advance to November’s midterm election.
3. U.S.-China Trade Developments Progress — China has offered to purchase nearly $70B of U.S. farm, manufacturing and energy products if the Trump administration abandons its threat for $50B in duties on China-made products. The White House, which is looking to reduce its trade deficit with China by $200B, has said it plans to move ahead with the tariffs shortly after June 15 as a way to pressure Beijing to make more sweeping changes in its economy.
4. EU Prepares tariffs against U.S. in July — the EU “expects to conclude the relevant procedure in coordination with member states before the end of June,” European Commission Vice-President Maros Sefcovic told a news briefing. From blue jeans to motorbikes and whiskey, the hit list of U.S. products targeted for tariffs reads like a catalog of emblematic American exports.
5. The Pentagon’s Hypersonic Weapons Project — Hypersonic weapons are among the technologies emphasized in the Senate’s newly released $716B defense authorization bill for FY 2019. But as Russia and China continue their march toward fielding hypersonics, the Pentagon and its largest weapons supplier have shared limited details about their own efforts. Lockheed (NYSE:LMT) will be responsible for designing, engineering, integration and logistical support on the $928M U.S. hypersonic project.
The week ahead — Economic data from Econoday.com:
Tags: Trade War