1) Trump Effect: US Imports From Vietnam Surge, While China Declines
And it's not just Vietnam that is a winner from the US-China Trade War:
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| source: statista.com |
Nevertheless, in a note this week, Anne Stevenson-Yang, co-founder of J. Capital Research (domain: jcapitalresearch.com), wrote that China has already entered its “Japanese phase,” marshalling financial resources exclusively to avoid crisis. China's economy is overleveraged, as demonstrated clearly by the Baoshang situation, and China may now be prey to further problems, perhaps even a perfect storm event.
China is again resorting to such tactics as gross overproduction of steel in a desperate attenpt to keep its economy humming, but even that may fail. In order of tonnage of crude steel, ArcelorMittal is first with 96.4 Mt (in 2006, India’s giant Mittal Steel acquired French giant Arcelor; and is now registered in Luxembourg as a mailbox company run from India) and the EU has had tariffs on Chinese steel for years.
Also note:
- Vietnam economy (GDP April-June quarter) grows nearly 7% on trade war tailwinds--Manufacturing exodus from China propels one of fastest boosts in region--nikkei.com.
- India Plans to Offer Incentives to Companies Moving From China--"aim is to become a production base for firms fleeing tariffs."
- Vietnam's Vingroup in deal with Fujitsu unit, Qualcomm to make 5G phones to be manufactured in Hanoi and sold in the U.S. and Europe in 2020.
- A Dark Alley in China’s Credit Market Is Getting Rough--bloomberg.com June 24, 2019.
- As China's Banking System Freezes, SHIBOR Tumbles To Lowest In A Decade--zerohedge.com June 24, 2019.
- Trump Pressured by Congress to Stay Tough on Huawei--bloomberg.com June 24, 2019.
- The U.S. is now playing down expectations for progress from a Trump-Xi meeting during the G20 June 28-29, with the U.S. holding its hard line demands for meaningful Chinese economic reforms, according to Bloomberg.
2) Facebook's Libra Could Disrupt the Remittance Industry
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| source: statista.com |
Money transfers a/ka "remittances" to low- and middle-income countries reached a record high of $529 billion in 2018, according to the World Bank and the world's total remittances in 2018 were $689 billion. “Success will mean that a person working abroad has a fast and simple way to send money to family back home,” says Libra’s white paper, and the UN Sustainable Development Goals aim to reduce the transaction costs of migrant remittances to less than 3 percent and eliminate remittance corridors with costs higher than 5 percent by 2030. Libra could lead the way. See also: How Libra Cryptocurrency & Blockchain Network Will Work (video).
3) Investing
YTD (Year-to-date): NASDAQ Composite +21% | S&P 500 Index +17% | DJIA +14%
Investor Notes:
EU: "There is no common Fiscal Policy. Thus the Eurozone stagnates, withers and has utterly lost momentum …" The next ECB president? "Best candidate for the ECB job is going to be a secondary issue to how many other jobs France and Germany get."--Bill Blain. And Brexit? UK looks cheap ... but we still face a few more months of fraxious uncertainty.
US: "... investors, both foreign and domestic, continue to buy Treasuries, no matter the risks associated with them. And the longer they buy Treasuries, the bigger the US debt load becomes, and — ironically — the lower the risk of default."--cfainstitute.org.
Zombies: A report from the Bank for International Settlements found 12% of publicly listed companies around the world can be described as zombie firms:
4) ICYMI Tech News:
Walmart Inc’s Indian unit Flipkart said late Thursday it plans to replace nearly 40% of its current fleet of delivery vans with electric vehicles (EVs) by March 2020.
iQiyi (domain: iqiyi.com) China’s version of Netflix, reportedly wants to enter overseas markets including North America and Japan after hitting a milestone of 100 million paying subscribers this month, even though the company has been in a cash-burning fight with Tencent’s video site and Alibaba-backed Youku Tudou in China. See also: China's Alibaba aims to double Tmall Global brands with English portal.
Toyota to invest $2 billion in developing electric vehicles in Indonesia.
Goodbye, Chrome? Google’s web browser has become spy software ... why Firefox is better says Washington Post (owned by Amazon's Jeff Bezos).
Google Drive vs. Microsoft's OneDrive: choosing the right cloud storage and collaboration service.
Bezos Blowback? Will The AWS JEDI Scandal Upset Amazon's Omnipotence?--zerohedge.com.
The Empty Promise of Data Moats--a16z.com: data goes stale over time…
The European Digital Social Innovation Index by Nesta, published for the first time this year, found London came out on top in a ranking of 60 EU cities on indicators such as funding, skills, infrastructure and diversity. The European Digital Social Innovation Index (EDSII) is the first index ranking how different European cities support digital social innovation (DSI) and tech for good to grow and thrive. London had a significant lead over Amsterdam, which came in second place. Copenhagen, Stockholm and Paris rounded out the top five.
Personal Tech: going 'off the grid' this summer? Iridium GO!--turn any smartphone into a satellite phone--you can get access to phone calls, text, and more, 'off-grid' via the Iridium satellite network.
Parting Thoughts:
-- John Poole, Editor, Domain Mondo
feedback & comments via twitter @DomainMondo
Follow @DomainMondo
DISCLAIMER
The DJIA closed at 26,599 on Friday, up 73 points, its best first half since 1999 and best June since 1938. It was also the best June for the S&P 500 since 1955.
US: Economy Breaks Record on Trump’s Watch--bloomberg.com: “If voters went to the ballot box today, it would be the strongest economy in U.S. election history,” said Justin Waring, an investment strategist at UBS in New York. Unemployment is close to a half-century low and inflation is so subdued that some have pronounced it dead.
Editor's note: this is neither a Bull Market nor a Bear Market, this is Trump's Market.
China: signs of a slowdown in China’s property market continue --office vacancies in tech-centric Shenzhen rose to more than 23% for the first half of 2019, a decade high, reported Caixin (domain: caixinglobal.com).Public default at Chinese trust company highlights cracks in market https://t.co/0jqIRRpbZa— ChinaEconomicReview (@chinaeconreview) June 26, 2019
EU: "There is no common Fiscal Policy. Thus the Eurozone stagnates, withers and has utterly lost momentum …" The next ECB president? "Best candidate for the ECB job is going to be a secondary issue to how many other jobs France and Germany get."--Bill Blain. And Brexit? UK looks cheap ... but we still face a few more months of fraxious uncertainty.
US: "... investors, both foreign and domestic, continue to buy Treasuries, no matter the risks associated with them. And the longer they buy Treasuries, the bigger the US debt load becomes, and — ironically — the lower the risk of default."--cfainstitute.org.
Zombies: A report from the Bank for International Settlements found 12% of publicly listed companies around the world can be described as zombie firms:
"The rising number of so-called zombie firms, defined as firms that are unable to cover debt servicing costs from current profits over an extended period, has attracted increasing attention in both academic and policy circles. Using firm-level data on listed firms in 14 advanced economies, we document a ratcheting-up in the prevalence of zombies since the late 1980s. Our analysis suggests that this increase is linked to reduced financial pressure, which in turn seems to reflect in part the effects of lower interest rates. We further find that zombies weigh on economic performance because they are less productive and because their presence lowers investment in and employment at more productive firms."--BIS report, supra."Policies created to pull the world out of recession are still in place, but now they are strangling the global economy ... we are in a fat and slow world," wrote Ruchir Sharma in the New York Times, June 15, 2019. What exactly is the problem?
"The trademarks of the fat and slow world: larger corporations, declining competition and fewer start-ups (all of which contribute to wage inequality), ... together undermine and slow economies already hindered by falling growth in the working-age population."--Sharma, supra.
4) ICYMI Tech News:
Jony Ive Is Leaving Apple--but he's not being replaced, and the design team reporting to operations makes no sense--daringfireball.net.Tech still drives US markets more than any other sector. If you don't like Tech stocks, it's hard to justify owning the S&P 500. We explain why here: https://t.co/W1RvpTkdHN $SPY $XLK $MSFT $FB $AMZN $AAPL $FB $GOOG $XLY $XLC pic.twitter.com/hUpUc0Qpib— DataTrek Research (@DataTrekMB) June 28, 2019
Walmart Inc’s Indian unit Flipkart said late Thursday it plans to replace nearly 40% of its current fleet of delivery vans with electric vehicles (EVs) by March 2020.
iQiyi (domain: iqiyi.com) China’s version of Netflix, reportedly wants to enter overseas markets including North America and Japan after hitting a milestone of 100 million paying subscribers this month, even though the company has been in a cash-burning fight with Tencent’s video site and Alibaba-backed Youku Tudou in China. See also: China's Alibaba aims to double Tmall Global brands with English portal.
Toyota to invest $2 billion in developing electric vehicles in Indonesia.
Google Drive vs. Microsoft's OneDrive: choosing the right cloud storage and collaboration service.
Bezos Blowback? Will The AWS JEDI Scandal Upset Amazon's Omnipotence?--zerohedge.com.
The Empty Promise of Data Moats--a16z.com: data goes stale over time…
The European Digital Social Innovation Index by Nesta, published for the first time this year, found London came out on top in a ranking of 60 EU cities on indicators such as funding, skills, infrastructure and diversity. The European Digital Social Innovation Index (EDSII) is the first index ranking how different European cities support digital social innovation (DSI) and tech for good to grow and thrive. London had a significant lead over Amsterdam, which came in second place. Copenhagen, Stockholm and Paris rounded out the top five.
Personal Tech: going 'off the grid' this summer? Iridium GO!--turn any smartphone into a satellite phone--you can get access to phone calls, text, and more, 'off-grid' via the Iridium satellite network.
Parting Thoughts:
- Tulsi Gabbard is the winner--Drudge instant poll shows Gabbard won the first Democratic debate in landslide.
- Always "ask if the algorithm, which is a model of the world, is working the way it was designed to work. Models represent the market, and models are not reality. As Alfred Korzybski said, “The map is not the territory.”
-- John Poole, Editor, Domain Mondo
feedback & comments via twitter @DomainMondo
Follow @DomainMondo
DISCLAIMER