1) US-China tensions begin (again…)
2) Fed commences secondary market bond ETF purchases
3) US House of Reps passes additional US$3 tr tax cut & spending bill, faces opposition from Senate & White House
4) S&P 500 constituents may look quite different by year end
5) Berkshire sells off majority of its stake in Goldman Sachs
1) US-China tensions begin (again…)
#1 The White House convinces a US Government Retirement Fund from investing into Chinese Stocks. “The U.S. Federal Retirement Thrift Investment Board, which manages nearly $600 billion in retirement assets for government workers, on Wednesday halted this year’s plans to invest in Chinese stocks…The main complaints about investing in shares of mainland Chinese equities, stem from securities fraud, accounting practices that do not follow the same accounting rules for publicly listed companies that others in the index follow, and the fact that at least three names on the index have either been sanctioned by the U.S. or are currently sanctioned.”
#2 The Trump Administration announced further trade restrictions on Huawei. “The latest rules will ban foreign firms that use US technology from shipping semiconductors to Huawei without US permission….The new restrictions will cut off Huawei’s access to one of its major suppliers, Taiwanese chip maker TSMC, which also manufactures chips for Apple and other tech firms.”
#3 Unofficial mouthpiece of the Chinese Government warns of retaliation. “Based on Global Times sources, if the US further pinches Chinese telecommunication giant Huawei by blocking companies such as TSMC from providing chips to the company, China will carry out countermeasures, such as including certain US companies into its list of “unreliable entities,” imposing restrictions on or investigating US companies such as Qualcomm, Cisco and Apple, and suspending purchases of Boeing aircraft.”
https://www.globaltimes.cn/content/1188494.shtml
2) The Fed commences secondary market bond ETF purchases
“The Federal Reserve purchased US$305m in exchanged traded funds that invest in corporate bonds through its Secondary Market Corporate Credit Facility on Tuesday and Wednesday, Fed data released on Thursday showed.”
3) US House of Representatives passes Heros Act, an additional US$3 tr tax cut and spending bill, but faces opposition from Senate and the White House
“The 1,800-page legislation contains a large number of provisions: nearly $1 trillion for state, local and tribal governments; another round of direct payments to individuals, up to $6,000 per family, including to unauthorized immigrants; $200 billion for hazard pay for essential workers; $75 billion for coronavirus testing and tracing; increased spending on food stamps; $175 billion in housing support; student loan forgiveness; and a new employee retention tax credit and extension of unemployment benefits.”
4) S&P 500 constituents may look quite different by year end
“the recent economic disruption and market volatility could mean that the committee overseeing the index could have to replace more than 30 companies this year, according to Nicholas Colas, co-founder of DataTrek Research.”
5) Berkshire sells off majority of its stake in Goldman Sachs
“The conglomerate slashed its holdings in the investment bank to 1.9 million shares from 12 million shares, according to SEC filings released Friday. “
This is after Buffett disclosed earlier that the firm had sold its entire stake in American, United, Delta and Southwest Airlines. Berkshire was among the three largest shareholders in the four airline carriers.
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