Financial and Economic Brief - April 10, 2018

by © Liberty Publishing, Inc.

Dow Volatility Continues

The new normal on Wall Street is about “wild fluctuations, mammoth moves and rapid-fire price reversals”. Three of the Dow's biggest daily point drops in its history have occurred this year. The roller coaster on the market has been powered by unsettling headlines: U.S. and China tariffs; Facebook’s data-privacy crisis; and worries about rising interest rates and inflation. In an attempt to soothe investors’ frayed nerves, Wall Street pros insist last year’s rally that pushed the Dow up 25% was the anomaly, and that the more violent price action this year is more normal market behavior.
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Gradual Rate Hikes, Appropriate

Federal Reserve President Charles Evans, said that he is “optimistic” inflation will reach the Fed’s 2% goal and that slow, gradual rate increases will be appropriate. The Fed next meets to set policy in June, by which time the Fed will have more inflation data in hand. If it remains on track for 2%, “continuing our slow gradual increases will be appropriate to get us to the point where monetary policy isn't really providing more lift to the economy,” Evans said.
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Russia’s Ruble Falls

Russia’s ruble experienced its biggest one-day fall for over two years on Monday and stocks in major Russian companies also slid, as investors reacted to a new round of U.S. sanctions. The sanctions target officials and business people around President Vladimir Putin in a response to alleged Russian meddling in the 2016 U.S. election. The impact of the new sanctions could threaten Russia’s economic recovery. Russia’s currency plunged 3.39% to its lowest level since November 2017. The sanctions mean Russian companies face the prospect of losing access to the U.S. market, which accounted for around 14% of Rusal’s revenue last year, according to analysts at Promsvyazbank.
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Financial and Economic Brief - April 10, 2018

• Dow Volatility Continues - The new normal on Wall Street is about “wild fluctuations, mammoth moves and rapid-fire price reversals”.

• Gradual Rate Hikes, Appropriate - Federal Reserve President Charles Evans, said that he is “optimistic” inflation will reach the Fed’s 2% goal and that slow, gradual rate increases will be appropriate.

• Russia’s Ruble Falls - Russia’s ruble experienced its biggest one-day fall for over two years on Monday and stocks in major Russian companies also slid, as investors reacted to a new round of U.S. sanctions.

Financial and Economic Brief - April 3, 2018

• Small Business Hiring Falls - According to a report from Paychex, small-business hiring in March fell to the lowest point in over seven years, while hourly earnings grew steadily.

• Apple to Make Own Chips - Shares of Intel fell 6% Monday on a report that Apple plans to start making its own processors for its computers as early as 2020.

• Spotify’s Strong Introduction - Spotify Technology SA shares “appeared on course” for a strong introduction, with opening price ranges well above where the stock had been trading in private markets.

Financial and Economic Brief - March 27, 2018

• Economic Crisis on Horizon over Trade? - A strengthening in U.S.-China trade tensions, which many are expecting from a new round of tariff threats from both sides, would result in an economic crisis.

• Remington Files for Chapter 11 - Remington Arms Co. and its parent Remington Outdoors filed for Chapter 11 bankruptcy protection over the weekend due to falling sales.

• Facebook Privacy Probe - Shares of Facebook Inc. fell more than 5% after the U.S. Federal Trade Commission announced its investigation of the social network.

Financial and Economic Brief - March 20, 2018

• Rate Hike Strategy - Jerome Powell, chairman of the Federal Reserve, heads toward his first interest rate increase this week.

• Retail Companies against Tariffs - The Trump administration is preparing tariffs against Chinese information technology, telecommunications & consumer products to force changes in Beijing’s intellectual property & investment practices.

• L’Oreal Purchases ModiFace - L'Oreal has purchased ModiFace, a Canadian firm that specializes in artificial intelligence and augmented reality technology.

Financial and Economic Brief - March 13, 2018

• Jobs Grow in February - According to ADP and Moody’s Analytics, companies added 235,000 jobs in the month of February.”

• Change to China’s Constitution - On Sunday China's parliament amended the constitution to remove the limit on the number of terms the president can serve.

• Dropbox Inc. IPO - Dropbox Inc. filed for an initial public offering of 36 million shares, giving the company a value of more than $7 billion at the high end of the pricing range.

Financial and Economic Brief - March 6, 2018

• Trump’s Tariffs - According to Commerce Secretary Wilbur Ross, President Donald Trump's tariffs are “no big deal.”

• Stocks Continue to Drop - The Dow Jones Industrial Average fell for the fifth straight day as concerns about a global trade war following the President’s threat to impose tariffs kept investors concerned.

• AXA to Acquire XL Group - French insurance company AXA has reached a deal to acquire XL Group for approximately $15.3 billion.