WHAT HAPPENED THIS WEEK?

⚡️ Fast Facts ⚡️

🎉 Pinterest (PINS) opened its IPO at $19 before climbing 28% during its first official day of trading on Thursday.

👨‍⚖️ Investors are suing Lyft (LYFT) for overstating its market position in the lead up to its IPO on March 29th of this year.

🔓 Millions of Instagram users’ passwords were exposed in plain text, Facebook (FB) Vice President of Engineering Pedro Canahuati announced on Thursday. Previously, it was thought to have only affected several thousand.

🛍 Retail sales in March showed 1.6% growth, its strongest gain in 18 months, with clothing and accessory sales leading the way.

🚬 The age to purchase tobacco might increase from 18 to 21 years old, Senate Majority Leader Mitch McConnell announced in a proposed legislative act on Thursday. Tobacco stocks fell significantly following the news.

Fed Taking Heat #AsExpected 🔥

Another week, another swipe at the Federal Reserve by President Trump in what has become a scarily unsurprising frequent occurrence. Trump tweeted on Sunday specifically citing quantitative tightening for why the Fed has done its job improperly since he appointed current Fed Chair Jerome Powell. He went on to claim that the general market indices should be up an additional 5,000-10,000 points while GDP should have crossed 4% growth instead of its current 3% state.

The tweet comes at a unique time for the president as his two picks for the Fed’s Board of Governors have become increasingly controversial. Stephen Moore, Conservative Heritage Foundation Fellow, and Herman Cain, former Godfather’s Pizza CEO, have faced backlash for their upcoming Senate confirmations. Many claim the two are too politically loyal to the president’s interests, a characteristic often looked down upon in the historically bipartisan Federal Reserve.

Trump has been a stark critic of the Fed since its 4 interest rate hikes in 2018, especially of Powell: the man he appointed himself. This trend is in direct contrast to the typical independence of the Fed in relation to the current state of politics. The Federal Reserve is intended to act without political intervention, yet President Trump has repeatedly attacked the Fed for its contractionary policy decisions in the past year.

In a rare move discussing politics, let alone of the foreign variety, European Central Bank President Mario Draghi explicitly called out Trump for his continuous aggressive comments towards the presumably independent Fed at the IMF meeting last weekend. Draghi explained that he was “certainly worried about central bank independence” specifically in the “most important jurisdiction in the world.” He went on to elaborate that political intervention in the Fed can lead some to believe the independent institution is subject to political advice rather than solely monetary policy decisions.

Not So Stagnant Chinese Growth 🇨🇳

The US and China continued to negotiate trade deals this past week. Although the US has seemingly had the upper hand in talks in the past due to China’s stagnant economic growth, new numbers might tell a different story.

Reports revealed this week that Chinese GDP rose 6.4% in the first quarter year-over-year. Specifically, March data showed that monthly retail sales grew 8.7% while factory production rose 8.5%. The economic spur was sparked by several measures implemented to counter the trade war. Most notably, a program that offered cheaper loans to those that studied Chinese President Xi Jinping’s thoughts and also promote the Communist Party.

Regardless of the recent surge in Chinese economic growth, the US still maintains the strong belief that a deal will be reached soon. White House economic advisor Larry Ludlow said that “very good progress” has been made in the ongoing negotiations.

This will be an important development to continue watching since the Chinese trade war has had arguably the most important impact on domestic and worldwide economic growth since its beginning.