Given we're in the middle of summer (at least in the northern hemisphere!), we wanted to test how many of you are really switched on to what's going on around you.
We've seen a number of seemingly disparate stories crop up this week, and we wanted to talk you through a handful which we think are connected by a specific theme - find out what that is towards the bottom of this newsletter!
Microsoft /TikTok
Following President Trump's threat to ban TikTok in the US, Microsoft announced it had entered talks with TikTok's parent company ByteDance over a potential takeover of it's US operations. Over the course of this past week, that dialogue seems to have changed to now include all of TikTok's major international operations, including the US, Canada, India, Europe, Australia & New Zealand. Talks remain preliminary and the two sides are racing to meet a 15 September deadline to reach a deal in order to prevent TikTok being banned in the US. With master-of-copy-and-paste Mark Zuckerberg also having introduced Instagram Reels in the past week, social media competition over funny 15-second videos seems to be hotting up this summer. President Trump hasn't been resting on his laurels either, announcing WeChat will also be added to the list of banned apps from mid-September, sending parent company Tencent's shares tumbling around 10% following the announcement.
US Fiscal Stimulus - Part 2
Republicans and Democrats were at loggerheads for most of the week over new government spending stimulus, with millions of Americans still out of work. There were many sticking points, but the high level summary is that Democrats wanted a $3.4 trillion package to support the economy while the Republicans had been pushing for something closer to $1 trillion, wary of adding more to an already-ballooning national debt. President Trump did he does best - tweeting his intention to pass the stimulus by executive action if both sides could not reach an agreement by a self-imposed deadline this weekend. At the time of writing, there was no deal in sight. This has played out like a Hollywood sequel which gets very boring very fast, with the same squabbling we saw during fiscal stimulus Part 1 in March.
July Jobs Report
Last month saw 1.76 million jobs added to the US economy, versus consensus expectations of 1.48 million. This leaves the unemployment rate at 10.2% versus consensus expectations of 10.6% - slightly better than expected. That said, market expectations weren't too far off the mark this time, and it remains a point of concern that US unemployment continues to hover around/above the 10% level - a historic high no matter how you slice it. This will be a concern for President Trump, who regularly boasts about the strength of the economy under his tenure and has even boasted about the strength of the labour market in the midst of the pandemic just a couple of months ago.
Earnings Season
We're through the thick of it as far as Q2 2020 earnings season goes now, with the sheer volume of reporting companies starting to die down over the next few weeks. That said, there are still 4,000+ companies reporting next week, some of which may be relevant to your portfolio. As usual, here's our pick of next week's reporters:
10 August - Barrick Gold, Duke Energy, Marriott, MercadoLibre, Occidental Petroleum, Royal Caribbean Cruises
11 August - CEZ, Norilsk Nickel, Prudential, Rakuten, Softbank, Uniper, Zalando
12 August - Commonwealth Bank Australia, China Unicom, Cisco, Dai-ichi Life, E.ON, Foxconn, Genmab, Metro, Orsted, SSE, Takeaway.com, TeamViewer, Tencent, Toshiba, Vestas Wind
13 August - Brookfield AM, Carlsberg, Celltrion, China Mobile, Deutsche Telekom, Deutsche Wohnen, Gazprom, Larsen & Toubro, Mitsubishi, Netease, Ping An, RWE, Straumann, Swiss Life, Swisscom, Telstra, Woodside Petroleum, Zurich Insurance
14 August - DraftKings, ICICI Bank, Rosneft, Sands China, WuXi
Common thread: All of the above are driven by or related to - at least in part - by Donald Trump's bid for re-election in November.
Until next time ✌️
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