Back To Work 💼 China Opens Its Wallet 💴

by | 7 Jan, 2019

 

1. Back To Work 

he holiday period is over and the markets are being christened with a big week ahead. US-China trade war negotiations are scheduled to restart, Brexit’s countdown clock ticks down and the US government shutdown drags on. Are you ready for a big week?

Last week’s rocky start was replaced by optimism on Friday as strong jobs data and a flexible approach to monetary policy from Jerome Powell helped soothe inflamed markets. The start of trade negotiations also brought a bit of confidence back to Asian markets with all major regional indexes opening in the green this morning.

Battered Chinese stocks will hope for positive developments in the talks, and any signs of a concrete deal coming into effect within the 90-day window will provide a solid boost for global markets.

In the UK, Brexit will be the flavour of the week as threat of a no-deal Brexit or second referendum escalates. Stock and currency movements will likely be driven by developments in the political process, so stay on your guard this week!

As the shutdown creeps into another week investors are starting to take the risks of a prolonged battle more seriously. President Trump’s mention of a declaration of emergency to circumvent congress on his border wall funding is a scary prospect. All we know is, the longer the shutdown endures, the greater the risks to the economy.

Gear up for a big week ahead, people.

 

 

2. China Opens Its Wallet

President Xi Jinping has signed off on a cozy $125 billion rail project as part of China’s monumental Belt & Road initiative in an effort to boost its flagging economy. That’s a hefty wallet!

Last week’s poor manufacturing data has forced President’s Xi’s hand to ramp up fiscal spending in 2019 to relieve some of the trade war pressure on China’s economy. Analysts expect this to be the first of a number of fiscal injections this year, after monetary policy measures in 2018 failed to stem the economic slowdown.

The $125 billion will fund the development of 6,800km of new railway lines in an effort to generate higher levels of internal productivity and consumption. This represents a 40% increase on last year’s production which fell short of the government’s expectations by some distance with 7 railways projects being abandoned. Yikes, it seems the relentless Chinese productivity of old went missing in 2018.

Even though China showed strong improvements in its services sector, its economy still relies too heavily on exports and manufacturing. So for now, fiscal spending can buy the Chinese economy some breathing room, but without any material improvements in the trade war, economic conditions will continue to deteriorate.

All eyes on the trade war negotiations this week…

 

Today we are watching…

1. Delta Air Lines (#delta)

Delta Airlines is set to post its earnings on Thursday amidst a struggling airline sector. Last week saw Delta’s poor revenue forecast drag down the entire sector with many competitors falling prey to the vicious sell-off too. Weaker demand across the industry has many analysts speculating about a poor earnings report, but only time will tell.

2. SPDR S&P 500 (#spy)

After some positive signals from the US economy, the S&P 500 finally looks to have gained some stability. Better than expected jobs data fueled a strong close to last week that is helping bring some confidence back to US markets. The week ahead will be an important benchmark for US stocks in 2019, so keep your eyes peeled!

 

 

 

 

 

 

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ALL RIGHTS RESERVED © INVSTR LTD. 2018

Risk Disclosure:

Invstr is a technology platform, not a registered broker-dealer or investment adviser. Invstr does not offer its own recommendations of any security or provide its own research to any user regarding any security transaction or order.

Please note, investing involves risk and investments may lose value. Past performance does not guarantee future results.

Brokerage services of US-traded securities, including fractional trading, are provided to Invstr users by DriveWealth, LLC a registered broker-dealer and member of FINRA/SIPC. DriveWealth may not establish investment accounts to residents of certain jurisdictions. 

DriveWealth provides no tax, legal, or investment advice of any kind, nor does DriveWealth give advice or offer opinions with respect to the nature, potential value, or suitability of any securities transaction or investment strategy. DriveWealth acts as the clearing firm for securities transactions entered on the Invstr mobile platform. DriveWealth is not affiliated with Invstr. Invstr does not participate in DriveWealth’s decision-making.

There is no minimum initial deposit required to open an investing account with DriveWealth. Expenses and Fees associated with the DriveWealth platform in conjunction with Beanstox includes either a monthly membership fee of $4.99 with a commission charge of $0.01 per share* or, in the event the membership fee is not paid, a commission charge of $0.0125 per share applies, subject to a minimum of $2.99 per transaction. There are no monthly minimum fees, or required ongoing minimum account balance. For non-resident aliens, there is a one-time tax verification fee of $5.00 (representing Form W-8BEN pass-through processing cost). View a full list of our fees at http://bit.ly/DWFees

The monthly subscription charge is four dollars and ninety-nine cents (US$4.99) per month plus one cent (US$0.01) per share traded (as examples, for a Transaction of 0.90 shares, the per share traded charge is one cent (US$0.01), and for a Transaction of 1.6 shares, the per share traded charge would be two cents ($0.02), and the quarterly subscription charge is fourteen dollars and ninety-nine cents (US$14.97) every 3 months plus one cent (US$0.01) per share traded. The monthly and quarterly subscription charges may be greater or less depending on additional services offered by a DriveWealth partners as part of the subscription model offering, or based on any subsidies provided by a DriveWealth partner as part of the subscription model offering. For non-resident aliens, there is a one-time tax verification fee of $5.00 (representing Form W-8BEN pass-through processing cost).View a full list of our fees at http://bit.ly/DWFees

This communication is not an offer or solicitation to purchase or sell securities. Investing in securities carries risk, including the loss of principal. Past performance is not indicative of future returns, which may vary. Online trading has inherent risk due to system response and access times that may be affected by various factors, including but not limited to market conditions and system performance. An investor should understand such facts before trading. The risks associated with investing in international securities, including US-listed ADRs and ETFs that contain non-US securities include, among others, country/political risk relating to the government in the home country; exchange rate risk if the country's currency is devalued; and inflationary/purchasing power risks if the currency of the home country becomes less valuable as the general level of prices for goods and services rises. Before investing in an ETF, an investor should consider the investment objectives, risks, charges, and expense of the investment company carefully. ETF prospectuses are accessible within the mobile application via a link under each company’s “Description.”

A fractional share is a share of equity ownership that is less than one full share. Fractional share investing has certain limitations and restrictions that investors should understand prior to purchasing fractional shares: ownership of less than one full share does not give the fractional share owner the right to vote on company matters; fractional shares are non-transferrable, meaning they cannot be transferred to another brokerage firm; and fractional share orders will be accepted as market orders only. For more information and details on fractional shares, and any associated limitations or restrictions please visit: https://drivewealth.com/fractional-shares-disclosure

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