U.S. Seaborne Imports Surging as Retailers Stock Up Early Container imports at the ports of Los Angeles and Long Beach jumped 8.4% in June amid ‘anxiety’ over trade tensions
Auto Industry Pushes White House to Withdraw Proposed Import Tariffs Auto makers, parts suppliers and dealers are joining forces to push back against the White House proposal to apply tariffs of up to 25% on vehicles and components imported into the U.S.
(…) “Raising tariffs on auto and auto parts would be a massive tax on consumers, who buy or service their vehicles,” according to an open letter to the president and jointly submitted by the auto industry’s main lobbying groups, including trade organizations that represent the foreign and U.S.-based auto makers, as well as auto dealers.
The Alliance of Automobile Manufacturers, which represents 12 of the largest auto manufacturers, warns the tariffs risk triggering a negative “domino effect” that would harm American workers and the broader economy, according to prepared remarks shared ahead of a hearing on Capitol Hill slated for Thursday. (…)
For instance, about 30% of the parts used in a U.S.-built Toyota Camry come from outside the country. A tariff on those parts would increase the price of a Camry by $1,800, the company said. (…)
The Fog of Trade War: The Trouble With Wall Street’s Favorite Buzzword When does a trade spat become a war? Depends who you ask. And without a common definition, it makes it harder for investors to gauge what is really at stake.
Economic Outlook ‘Quite Strong,’ Says Former Fed-Chief Bernanke isn’t alarmed by recent bond-market developments many see as hinting at trouble down the road
(…) “Everything we see about the near-term outlook for the economy is quite strong,” Mr. Bernanke told reporters in a roundtable interview Monday with Tim Geithner, a former New York Fed chief and Obama administration Treasury secretary, and Henry Paulson, a former Goldman Sachs banker turned George W. Bush administration Treasury secretary. (…)
“There’s an argument” that maybe inversions aren’t the signal they once were because long-term interest rates “are unusually low,” as is the market-based compensation for risk, Mr. Bernanke said. He added that bond buying by other central banks and regulatory changes are also altering bond-market levels. The yield curve “is one indicator, but you wouldn’t want to religiously consider that being the only indicator,” Mr. Bernanke said.
The former Fed chair has cast a cautious eye toward the yield curve before, and it turned out to be the wrong call. In 2006, he brushed off a yield curve teetering around inversion and said he wouldn’t interpret it as “indicating a significant economic slowdown to come.” He also said that “the bottom line for policy appears ambiguous.” The economy was in recession by 2007. (…)
ETFs Unlikely to Cause Major Disruptions, Report Shows
(…) “There is an impact and that impact can be significant,” Mr. Sandberg said in an interview.
But the researchers also concluded that the money sloshing into and out of ETFs, in particular, is unlikely to cause widespread price disruptions. (…)
The price impact was “modest” and tended to disappear within a few days, the report said.
“There’s not much cause for concern for systemic risk,” Mr. Sandberg said. “But we have been able to quantify that there’s some minimal impact.”
BlackRock’s Fink Sees U.S. Slowdown, 10-15% Market Drop in Tariff War
Google Hit With Record $5 Billion EU Fine in Android Case The European Union fined Alphabet’s Google $5 billion, a record for the bloc and a decision that could loosen the company’s grip on its biggest growth engine: mobile phones.
In the EU’s sharpest rebuke yet to the power of a handful of tech giants, the bloc’s antitrust regulator found Wednesday that Google had abused the dominance of its Android operating system, which runs more than 80% of the world’s smartphones, to promote and entrench its own mobile apps and services, particularly the company’s search engine.
Android phones come preloaded with Google apps and services, including Search. Competitors have long complained that Android’s dominance gives Google an unfair advantage in attracting users to those apps—and then using data from them to devise and target advertising. The preloaded apps stifle competing apps, the EU said. (…)
“Google has used Android as a vehicle to cement the dominance of its search engine. These practices have denied rivals the chance to innovate and compete on the merits,” said EU competition chief Margrethe Vestager. (…)
Now, Google may be forced to offer new terms that give handset makers and phone carriers more freedom to feature their own apps, strike deals with Google’s rivals or even charge the company for pre-installing its apps. (…)
Google said it would appeal the decision. Google says Android has increased competition among smartphone makers, lowering the prices for consumers. The company also says the allegation that it stymied competing apps is false because manufacturers typically install many rival apps on Android devices—and consumers can download others. (…)
- Why is the issue surfacing in Europe, and not the U.S.?
In the EU, it is illegal for a dominant company to abuse its market position to harm rivals. In the U.S., antitrust enforcers look more closely at whether and how consumers are harmed. The latter can be more difficult to demonstrate. (WSJ)
EARNINGS WATCH
We now have 39 reports in and the beat rate is 85% with a +4.7% surprise factor. Q2 estimates are moving up: +21.2% vs +20.7% on July 1st. Ex-Energy: +17.4%. Revenues: +8.2% vs +8.1%. Ex-Energy: +7.1%.