Justin Irving | The word “boom” evokes some temporary period of above-average economic growth. The Roaring 20s, the plentiful 50s and 60s and the Dot Com era. Because booms are characterized by unexpected levels of economic growth, asset prices, which had not priced in the growth, rise sharply. Is this what is going on US economy today? Not quite.
I. de la Torre and L. Torralba (Arcano Partners) | The economist Dornbusch says that “crises take long to arrive than you can possibly imagine, but when they do come, they happen faster than you can possibly imagine”. The events that have affected the emerging countries this summer have proven Dornbusch was right.
Shaun Riordan | Social media companies may be sophisticated in the way they monetise data, but they remain remarkable naïve, almost innocent, when it comes to politics.
Intermoney | American companies continue to benefit from the favourable tail winds of solid growth in the world´s biggest economy and from the aftermath of the fiscal reform, which has also served to improvement in payments to shareholders.
David Page (AXA IM) | We believe the US has been using tariffs primarily as a negotiation tool; China appears a special focus. But domestic political motives also appear to be a driver.
BoAML do not think the Juncker-Trump trade agreement is a game changer. Rather they argue that the deal lowers the near-term risk of an auto trade war, supporting their cautious optimism on Europe. However, the deal is largely symbolic in nature, and as we have seen with past “ceasefires”, it may not last long.
Gabriel Felbemayr, since 2010 Director of the Centre for Foreign Economy at the Ifo Institute in Múnich, explains that “the EU has a clear advantage over the US in the old economy: cars, machinery and chemicals. But the US enjoys an advantage in the so-called new economy, in digital and financial services, leisure. This is the target for the EU.”
Benjamin Cole | Fed Chair Jerome Powell has stated the Fed’s 2% target is symmetric, which may be code words for “inflation a little above 2% is tolerable.” The US central bank may find fighting inflation resembles heart surgery with a chainsaw.
Within the framework of the comercial dispute that the US has opened with the EU, the Trump administration has launched a special crusade against the producers of black olives in Spain. According to US authorities, they have been exported to the US at “dumping prices” and damaged the Californian olive sector. The US Commerce Department began investigations in July last year on the Spanish industry, which are awaiting final confirmation. The definitive decision will be known today Tuesday.
Israel Rafalovich | A remarkable summit between the EU and China in Beijing was marked by a turning point in Chinese views of the European Union. The summit unblocked talks about further opening of Chinese and EU market access and investment and speed up negotiations over geographical indications.