WHAT HAPPENED THIS WEEK?

⚡️ Fast Facts ⚡️

🇨🇳 Chinese tariffs will not be lifted until Beijing shows proof of compliance with any trade deal agreed upon, President Donald Trump announced on Tuesday, causing investors to worry that this trade war is more aptly described as a ‘trust’ war between the two nations.

🛢 Crude oil to reached its highest level in 4 months, surpassing $60 for the first time since last November after OPEC agreed to continue its production cuts until the end of June.

👖 Levi Strauss (LEVI) opened at $17 per share during its IPO on Wednesday and rose 33% during its first day of trading since the company was taken private in 1985 for $1.7 billion. The stock closed at $22.50, giving Levi a current market cap of $8.7 billion.

🏭 General Motors (GM) announced it will open an electric-car plant near Detroit, following criticism from President Trump against its idle Lordstown, Ohio factory.

🤝 Fidelity National Information Services (FIS) agreed to purchase Worldpay (WP) for $34 billion last weekend, the biggest deal ever in the international payments industry.

🏀 Papa John’s (PZZA) has turned to Shaq to help repair their brand’s image after the founder left the company amidst multiple sexual and racial misconduct scandals late last year.

Powell Struggle 🙏

The Federal Reserve announced on Wednesday that it is not expecting a rate hike in 2019, citing the ongoing trade war, the Republican tax cuts, and the global economic slowdown caused by Brexit and China’s troubles as reasons for slowed US growth. 

The Fed had previously expected growth to reach 2.3% from last December, however, they lowered expectations to 2.1% this week. The White House still maintains its 3.2% prediction which has little bearing on investors expectations.

Federal Reserve Chair Jerome Powell specifically said the economy is “in a good place” in a news conference on Wednesday. However, he acknowledged that growth is slower than expected and even hinted that the next Fed move might be an interest rate cut rather than a hike.

The market rallied following the news as the Dow rose 0.8% while the S&P rose 1.1% and the Nasdaq 1.4%. But those rallies were short-lived as markets fell sharply on Friday to close the week. Why? Well, the Fed is not raising rates because the economy is growing slowly, so investors are already pricing that slow growth into their investment decisions. Next week will be interesting as investors take the weekend to digest Powell’s comments further.

Semiconductors, who? 🙏

The golden children of the 2017 stock market boom, semiconductors were a household name as recently as last year. But following the downfall of cryptocurrency, semiconductors found many of their stocks tanking as early as October 2018. However, this week saw the resurgence of several of the most prominent semiconductor stocks.

Micron Technology (MU) paced the microchip industry as it rose 9.6% to $43.90 on Thursday, its largest increase in 2 years and highest price since mid-October. The company beat quarterly earnings expectations albeit with a light forecast for the next quarter.

Advanced Micro Devices (AMD) jumped 8.5% while Nvidia (NVDA) rose 5.5%. Micron is down 28% on the year while Nvidia is down 26%, however, Advanced Micro has posted a strong return of 150% for its investors in the past year.