Erdogan opens Turkish lira to new line of attack 6 Aug 2018 The currency hit a record low against the dollar after the United States said it was reviewing Turkey’s duty-free access to its markets. President Tayyip Erdogan has alienated investors. The tougher he talks to the world’s largest economy, the more they’ll punish Turkish assets.
Luxury investors take benign view on trade wars 3 Aug 2018 A growing spat between China and the U.S. threatens sales in the sector’s two most important markets. A weaker yuan would make overseas shopping pricier for spendthrift Chinese tourists too. With share prices near record highs, investors are exposed to anything but all-out peace.
Trumponomics flirts with more debt and inequality 31 Jul 2018 Treasury Secretary Steven Mnuchin wants to cut capital-gains tax bills by accounting for inflation. It’s sensible to assess the true value of costs and profit. But it’d mostly benefit the wealthy and add to what may be a $1.1 trln deficit in 2019. It also smacks of self-interest.
Tariff truce leaves EU carmakers stuck in low gear 26 Jul 2018 Volkswagen, BMW and Daimler’s collective value rose about $7 bln after U.S. President Donald Trump seemed to relent on auto tariffs. It’s a minor victory. Transatlantic peace may not last, while Trump’s trade battle with China will still prove disruptive for the German trio.
EU-Japan pact too tiny to lift Trump trade blues 17 Jul 2018 A deal between nations that account for nearly a third of world GDP has symbolic value and may save European companies up to 1 bln euros a year in custom duties. But such benefits are dwarfed by the damage the U.S. president could inflict with more tariffs, say on car imports.
India’s Cairn Energy fire sale is short-sighted 9 Jul 2018 Tax authorities have sold part of a stake in Vedanta Limited seized from the UK company in a $1.3 bln tax dispute, weeks before the pair go to arbitration. India only pockets $216 mln, half what the shares were worth at the start of the year. The timing and the logic look flawed.
Auto tariff deal hopes are rightly restrained 5 Jul 2018 Carmaker shares rose after a German newspaper reported Europe may be able to avoid higher U.S. levies on exports. But BMW, Daimler and Volkswagen’s valuations are still down a fifth since January. Caution is sensible given the unpredictability of White House thinking on trade.
U.S. sales-tax fix has global parallels 21 Jun 2018 The Supreme Court scrapped precedent and said states can force retailers to collect levies on sales to residents even if the sellers aren’t physically present. States will regain a tax base eroded by geographical arbitrage and the internet – two causes of worldwide tax tensions.
Tax reform puts utilities’ good credit at risk 21 Jun 2018 Debt investors have long favored power companies because their regulated monopoly status provides good assurance of payback. But tax cuts are limiting companies' billing power and their ability to deduct investment spending. Natural disasters add an extra layer of risk.
EU’s best bet is to indulge Trump on car tariffs 20 Jun 2018 Europe’s tit-for-tat response to U.S. metal duties risks a trade war that hits EU carmakers. Better to offer President Donald Trump the carrot of lower auto tariffs, which have little effect anyway. That could humour his trade antics, but cause less economic damage.
Gary Cohn only delayed inevitable trade war 14 Jun 2018 The Goldman Sachs banker who went to the White House says U.S. trade spats could wipe out the benefits of tax cuts he championed. President Trump may yet escalate his campaign against China. Cohn was a helpful buffer, but Trump’s anti-globalist instincts are now in full control.
Election shake-ups will make NAFTA more elusive 5 Jun 2018 Doug Ford, a Canada-first candidate, has a shot at becoming the next premier of Ontario – the province that will be hardest hit by U.S. steel tariffs. Voters also go to the polls this year in Mexico and the U.S. New political faces will make sealing a trade deal even harder.
Investors retain edge over in-demand U.S. workers 1 Jun 2018 U.S. job creation strengthened in May with the unemployment rate hitting an 18-year low of 3.8 pct. Even so, wages rose only 2.7 pct year-on-year. The White House said corporate tax cuts would translate into higher pay. But buybacks have so far made shareholders the real winners.
EU divisions are weak spot in U.S. trade fight 1 Jun 2018 Responding to American tariffs with duties that hit Republican-controlled districts is shrewd. The next step is harder. Germany’s best option is to ease tensions by cutting car tariffs, but France opposes concessions. Eastern Europe may care more about U.S. security guarantees.
Autos investors too quick to call Trump’s bluff 24 May 2018 German carmakers export a ton of vehicles, yet their stocks fell just 3 pct after the U.S. president threatened import tariffs. It implies they think Washington is just posturing, or that BMW and the like can mitigate the impact. That may prove to be overly optimistic.
Energy firms stuff MLP minority owners in pipe 17 May 2018 Williams is only offering a 6 pct premium for the quarter of its subsidiary it doesn’t own. Enbridge and Cheniere put even less on the table. The recent loss of some tax breaks makes MLPs less attractive and prompted the moves. But independent shareholders are getting a raw deal.
Tax cuts hasten demise of U.S. corporate pensions 15 May 2018 With a $6 bln annuity purchase, FedEx has offloaded a chunk of its obligations. Lower U.S. tax rates are encouraging more companies to do the same. It’s good for older workers, but it’s another nail in the coffin of employer-provided retirement security for millennials.
Capitalism shunts all else aside in Beverly Hills 2 May 2018 Markets are fine, volatility is modest and trade war isn’t a big deal, say delegates at junk-bond king Michael Milken’s annual L.A. summit. In other words, the freewheeling spirit Milken once embodied is back in vogue. Thank President Trump – and a dose of complacency.
UK raises global bar in tax secrecy fight 2 May 2018 Britain will force overseas territories like the Cayman Islands to reveal the owners of anonymous companies. Those looking to avoid tax and scrutiny can move their business, but the UK's action will throw the spotlight on other shelters like the United States and Hong Kong.
Bookie investors misjudge odds in political casino 24 Apr 2018 William Hill, Paddy Power Betfair and GVC collectively lost 1 bln stg in value on reports Britain may cap betting-machine stakes and hike levies. That’s worse than feared, but not unimaginable given low UK gambling taxes. Smarter investors would have seen the writing on the wall.