1. Farmers Feel The Pinch
And that’s putting it lightly. The prolonged government shutdown is now obstructing US farmers’ ability to claim financial aid or even apply for loans to fund next season’s crop. Looks like President Trump is planting some resentment seeds in one of his strongest support bases.
At a whopping 19 days, the shutdown is officially the second longest in history and it still seems far from over. Farmers were promised $12 billion in relief aid to offset the effects of the US-China trade war, but with nobody to dish out the cash the problem is beginning to snowball.
With the US Department of Agriculture (USDA) closed, farmer loans cannot be approved and important agricultural data cannot reach the markets. The USDA’s data is a vital market driver used to project market trends. Without it, the entire farming supply chain and commodities market is in the dark. The longer the crisis persists, the more dangerous it gets.
For now the situation is under control, but the compounding effect of uncertainty will filter through into commodity and futures prices soon enough. Let’s hope President Trump and Nancy Pelosi can find some common ground before the snowball becomes an avalanche.
2. Outer-Space Gold Rush
Investors are eyeing up the moon as the next gold rush destination for investment thanks to its rich mineral deposits and strategic military and commercial positioning. Say what?!
China’s recent mission to the far side of the moon has spurred renewed interest in a space-based economy (don’t get too excited Mr. Musk we’re not there yet). A number of countries and private companies have started honing in on the moon in an effort to either harvest resources or set up shop for further exploration into space.
The moon’s supposedly-extractable water and mineral resources make it a useful weigh station to create fuel and sustain life for commercial and research purposes. It has always also been viewed as the ultimate military high-ground…now that’s a scary prospect.
Morgan Stanley expects the space economy to grow from $385 billion today to roughly $1.1 trillion by 2040, with aerospace & defense and satellite companies set to benefit extensively from the new space-based gold rush.
Companies like Lockheed Martin, Boeing, SpaceX, Alphabet and Northrop Grumman are ideally positioned to take advantage of the space race. Perhaps their stock prices will go into orbit too?
Today we are watching…
1. USD/CNY (#usdcny)
The Chinese Yuan has been appreciating strongly since mid-December, but has accelerated thanks to positive trade talk sentiment. Coming off its weakest value in 5 years, analysts believe the Yuan still has room for a considerable comeback if conditions in China’s market continue to improve. Worth watching!
2. Chevron (#chevrn)
US oil-producer, Chevron, has been the beneficiary of the boost in oil prices this week with its stock price appreciating 2.51%. Its attractive 3.5% dividend has also caught the eye of investors looking for a strong cash component to their portfolios to offset higher volatility in the market. Stronger oil prices will continue to boost Chevron’s performance, so keep an eye on this one.