Markets steady as we mourn the losses of those involved in the Las Vegas shooting. Our prayers go out to each and every family affected by this atrocity.
President Trump’s advisors have officially finalized the list of potential Fed Chair replacements for Janet Yellen this past week. Although Yellen is still being considered for reappointment, it is widely-accepted that Trump will appoint a new Fed Chair. Rumors are circulating that Goldman Sach’s (GS) former president Gary Cohn will take the slot, he currently serves as the Director of the National Economic Council. Trump announced last Friday that he was only 2-3 weeks away from making a final decision. This will be an interesting development to watch as the new Fed Chair will have a massive impact on future rate hikes and the imminent unwinding of our country’s balance sheet.
Catalonia announced on Sunday that an unofficial vote had shown a majority of citizens were in favor of seceding from Spain. The Catalonian president questioned the legality of Spain’s economy while calling out King Felipe for ignoring his people and treating them violently. Catalonian bank stocks plummeted following the news as investors feared depositors would start moving their money to different Spanish lenders.
The dollar continued to rise early in the week as US factory data released on Monday showed better-than-expected numbers. Combined with Catalonia’s plea for independence and the expectation of a hawkish new Fed chair, the dollar continued to be supported by the outpour of news this week.
Amazon (AMZN) was ordered to pay €250 million plus interest in back taxes to the country of Luxembourg on Wednesday after the European Union found that the company was given an unfair tax advantage. Amazon recently moved its regional headquarters to Luxembourg and was given private tax benefits seemingly to attract the worldwide e-commerce giant into relocating. Similar issues arose last year when Apple (AAPL) moved its regional headquarters to Ireland in its €13 billion deal. The European Union continues to echo that selective tax benefits to global companies will remain illegal.
The Bank of Australia announced Monday that, as expected, it would keep rates unchanged. While many other central banks continue to hike rates, Australia’s central bank refuses to join the rest of the world’s hawkish perspective. Australia has maintained a record-low rate of 1.5% since last August as it waits for a stronger job market to hopefully lift wages.
Puerto Rico’s benchmark bonds due in 2035 have continued their downward spiral as they hit a record-low of 32 cents on the dollar on Wednesday. The bonds began their fall after Hurricane Maria barreled through the island putting future debt recovery in question. On Tuesday, President Trump stated that the US territory’s debt might have to be wiped out to fully recover from the destruction, further raising concerns about the island’s debt recovery plan.