Considering the timing of the Facebook Senate hearings Tuesday, we knew it was just a dog and pony show, given the fact that the Zuck donates to around 85% of those senators in attendance, writes Nell Sloane of Capital Trading Group Wednesday.
Anyway, usually these types of hearings aren’t negative for an equity and, in fact, the markets overall are doing quite well as of this writing.
So, take this as nothing more than an informal information hearing.
As to Facebook (FB) being held responsible, we highly doubt it.
What this should point out to people is the fact that anything and everything that you put on the internet is open for download, by anyone good or bad.
However, and a big however is whether or not this should be regulated, whether or not Facebook is using censorship, whether or not free speech is free.
This opens Pandora’s box in terms of rights toward one’s data and we expect this to be an ongoing process.
We would just like to say, if you don’t want your data out there, don’t put it out there, period. Power is on the individual, nobody is telling you to go get a Facebook, Instagram, Snapchat etc.
So, no complaining, just action please.
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We read further this week China has boycott buying U.S. debt. Hmm, let’s just see how long that lasts.
It makes it a bit tougher to peg a currency if you’re not intervening. We feel this bluff won’t last long both from a fundamental viewpoint and certainly a domestic stability front.
As far as China and their massive credit financing schemes, ghost city infrastructures, WMPs etc. to put this into perspective in a matter of just two decades, the PBOC has grown its balance sheet from $40 billion to over $4 trillion.
There is a cost to that type of hyper growth and unfortunately money is debt and thus a government must also pay the interest costs associated with such growth.
And in China’s case exports are the driver and when someone like the U.S. pulls a protectionist move, it’s like an artery that gets clogged. You either fix it or the problem kills you, so we’ll see where this all goes.
I think Trump knows the “America First” agenda is catching many of our partners by surprise and this is the best way to force change.
A few items of note this past week:
The BLS Payroll report was out last Friday and it posted a huge miss, adding only 103,000 jobs with an expectation of 185,000. Labor participation is stuck near 63% which is where it’s been the last few years. The unemployment rate stood still at 4.1%.
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S&P 500 earnings are expected to rise 18.4% in Q1 according to consensus estimates, driven largely by the huge Trump tax cut. This would also be the largest profit rise since Q1 2011.
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Fed Chair Jerome Powell was in Chicago this week and suggested that “there was no hurry to pick up the pace of rate increases and described the current course as prudent.” (WSJ)
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ICE to buy Chicago Stock Exchange, WSJ reported estimate price of around $70 million.
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S&P 500 (SPX) lost 58 points, the Dow Jones Indiustrials (DJI) lost 572 and the NASDAQ (NDX) lost 161 Friday.
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U.S. deploys Truman Carrier Strike Group and seven warships with cruise missiles to the Mediterranean.
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BofA had a great article out this week noting some very interesting things. The first thing that stood out is the fact that central bank policy is driving equity flows as both Europe and to a better extent Japan equity flows continue.
