Weekly Overview (03 – 07 September 2018): Barack Obama berated Trump, urged voters to restore “some semblance of sanity” in US politics
After refraining to comment on the questionable decisions made by US president Donald Trump for two years on end, Barack Obama has finally emerged from the shadows. In a passionate speech at the University of Illinois on Friday, the former US president urged his fellow citizens to vote against the Trump presidency and put an end to its “abuses of power”.
Barack Obama’s call for action comes at a time when both parties are turning to their supporters for help in the upcoming November 6 midterm elections. As of now, Democrats have to acquire 23 seats in the House of Representatives and at least two seats in the Senate to be able to derail Trump’s aggressive trade negotiations and immigrant policies.
During the speech, Obama voiced his concerns regarding the dishonest and indecent practices of the Republican party that not only undermined the diplomatic relations of the nation, but the well-being of the Americans themselves—that of the very people it has sworn to protect.
However, unlike many critics before him, he pointed out that the current president is merely the symptom, and not the cause, of a democracy wallowing in “cynicism” and “indifference”.
“In the end, the threat to our democracy doesn’t just come from Donald Trump or the current batch of Republicans in Congress,” spoke the former US president. “The biggest threat to our democracy is indifference. The biggest threat to our democracy is cynicism.”
Obama’s next destination prior to the midterm elections is said to be the state of Pennsylvania, followed by Ohio and another visit to Illinois.
On Tuesday, the Governor of the Australian Reserve Bank Board Philip Lowe made a statement in which he confirmed the Board’s decision to leave cash rates unchanged at 1.5%. According to the governor, that rate has not seen any change for over two years and that the Board does not intend to raise it anytime soon.
In the UK, the Purchasing Managers’ Index report showed a positive growth in service sector activity for the month of August. According to the report, improving business conditions led to the quickest rebound in employment growth for the past six months.
However, respondents pointed out that there is still a painful shortage of suitable candidates to fill the vacant spots in the sector. Moreover, their business optimism was much lower than expected—in fact, managers’ optimism was at a five-month low.
The total non-farm payroll employment report for the United States revealed that an extra 201,000 of people were hired for the month of August. Despite that the unemployment rate remained unshaken at 3.9%.
According to the US Bureau of Labour Statistics, the business sectors that benefited from “fresh recruits” the most were the business services, health care, wholesale trade, transportation and warehousing, and mining sectors. There are currently 6.2 unemployed Americans at the time of writing.
On Wednesday, the Bank of Canada issued a statement that it has managed to preserve the overnight rate target of 1.5%, thus leaving the Bank Rate at 1.75% and the deposit rate at 1.25%, respectively. According to the report, CPI inflation in the country had amounted to 3% for the month of July, which exceeded BOC expectations for the period.
AMD’s stock gained another 11% on Tuesday by closing at $28.06 per share, thus confirming a round of bullish calls from Wall Street. The chipmaker is currently enjoying a 173% increase in stock price and is ranked as the #1 technology stock under the S&P 500 index.
Evercore ISI reduced Seagate’s rating to “underperform” and Western Digital’s rating to “in line” due to concerns that the selling prices for the flash memory and hard drives made by both companies will take a double digit percentage hit going into the first half of 2019. As a result Seagate shares fell by 7.7% on Tuesday, and Western Digital’s stock—by 4.7%.
Gamestop’s net sales tumbled to 18.5% ($300.9 million) after a dissatisfying quarterly report on Thursday. The fall in stock price of around 5% was dictated by the relatively weak video game software sales performance at the company’s widespread outlets.
Goldman Sachs issued an apology last week, stating it greatly underestimated customers’ demand for the newest lineup of Apple’s iPhones. As a result, Goldman was quick to correct its price target of the technology giant’s stock from the initial $200 to $240 per share. On Friday, Apple shares rose by 0.7% to $224.65 as a response.
“We had expected worse iPhone X demand and some pullback in the stock — clearly neither of these two things happened,” commented analyst Rod Hall in a note.
The S&P 500 index closed at 2,871.68 (-0.22%) on Friday, followed by the NASDAQ at 7,430.26 (-0.31%), the Dow Jones at 25,916.54 -79.33 (-0.31%), and the NIKKEI 225 at 22,449.80 (0.64%).
Last Friday, Gold and Silver were valued at $1195.15 per ounce and $14.14 per ounce, respectively.
Things are looking grim on the crypto front as Goldman Sachs is reportedly abandoning its initial plan to open a trading desk for cryptocurrencies. Immediately, the Bitcoin reacted to the news by slipping below the $7,000 threshold, while the remaining currencies on the top 5 list suffered even greater losses of over 12%. When asked about the decision, Goldman replied to the press with the following statement:
“In response to client interest in various digital products, we are exploring how best to serve them in the space. At this point, we have not reached a conclusion on the scope of our digital asset offering.”
The USD/CAD pair is expected to range between 1.3114 and 1.3201. The Loonie received a boost of 0.5% on Thursday due to an upbeat message from Senior Deputy Governor of the Bank of Canada Carolyn Wilkins speech where the Canadian economy was referred to as being on “solid footing”.
The EUR/USD is expected to range between 1.1601 and 1.1649 after trading on a relatively tight range for the better portion of the week.
The GBP/USD is expected to range between 1.2913 and 1.3026. The Great British Pound stood its ground on Thursday and ended up trading at 1.2997 on Friday.