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In a surprise move, President Trump announced on Friday that the U.S. will impose a 5% levy on "all goods coming into our country from Mexico" from 10 June 2019, which will "gradually increase until the illegal immigration problem is remedied." This exacerbated the earlier damage from the U.S./China trade dispute with China suggesting it was getting closer to unleashing its response to the U.S. ban on Huawei Technologies. The Dow recorded its sixth straight down week and other global indexes struggled as well. A stronger Australian dollar also crimped returns.

That said, over the weekend China and Mexico both signalled a willingness to negotiate with Washington over escalating trade issues. Mexico has rushed a delegation to the U.S. to discuss immigration issues and Beijing has just released a government policy paper on trade issues. The tone was more reasonable than the nationalistic rhetoric put forth by state media and some officials in the past three weeks, and Chinese trade experts said the point is to signal that talks can resume.

Weekly returns to 31 May 2019
(AUD 5-day return far right- hand column)

Source: Bloomberg

Last week’s U.S. economic highlights

Consumer confidence for May remained strong. The Conference Board Index registered 134.1 (E 130 and P 129.2). The University of Michigan Sentiment Index final for May came in at 100.0.


And personal income for April increased 0.5%, better than expectations of 0.3% and March’s 0.1% which is why this chart is so positive:


Notable company news

Alphabet (NASDAQ: GOOGL)

The U.S. Department of Justice (DOJ) is apparently preparing a new antitrust investigation against Google parent Alphabet Inc. This comes six years after a similar probe from the Federal Trade Commission, which resulted in no significant damage to the company. Google’s dominance of internet search and the related advertising business makes it an easy target. The company garners more than 60% of the world’s search ad market.

Unfortunately, large successful technology companies will continue to be under scrutiny by regulators. Facebook is a case in point, and by being proactive towards complaints results in a successful defense and a higher stock price. I expect Alphabet’s management to respond accordingly.

Alphabet is held in four of Macrovue’s thematic portfolios: “AI”, “Disruptive Technologies”, “Social Media” and “Tech Stars”.

US Q1 2019 earnings season

A summary for companies we've included in our thematic share portfolios (Vues) can be found here.


  • 10-Year Treasury yield: -9 bps to 2.14%
  • Gold: +0.15% to US$1305
  • WTI crude oil: -5.5% to US$53.30
  • AUD/USD: +0.40% to 69.38

The week ahead


The economic calendar is a big one, including the major employment reports and the ISM indexes. 

Source: briefing.com

Charts of the week

1. S&P 500 Earnings Reports Recap (1Q 2019)



2. Tarriff scenario (S&P 500 EPS)

No big hit to earnings even under “severe” scenario...


Source: Goldman Sachs


3. There are about 5.3bn people on earth aged over 15. Of these, around 5bn have a mobile phone


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