Saudia Arabia Announces IPO of World's Most Profitable Company.

As of today, Saudi Aramco, the largest oil producer in Saudi Arabia, announced that they plan on releasing an IPO by early December. Due to their profitability and sheer size, this is a very impactful event for investing. Analysts have the value of Aramco between 1.5 and 2 trillion dollars. For a little perspective, selling even 1% of Aramco stock could be worth up to 15 billion dollars. The main issue they are having, however, is that they are finding it hard to get listed in New York or London because of heavy environmental concern. Do you think Aramco should be publicly traded, or no because we should be investing our money in cleaner energy?

https://www.cnn.com/2019/11/03/investing/saudi-aramco-ipo/index.html

U.S. Consumer Confidence Dips in October, Misses Expectations

    In October U.S. consumer confidence saw a slight dip compared to months previous. This caught a lot of people off guard because the Dow Jones expected approximately a 2% increase in consumer confidence but saw a half percent decrease to 125.9. This is the lowest that consumer confidence has been since June when it was 124.3. It was said that the consumers are worried about the future job prospects and future business conditions but weren't necessarily worried about the current state of business conditions. This decrease hasn't seemed to cause any distress because consumer confidence is still at a very high level. What do you think that this shows for the future levels of consumer confidence?


https://www.cnbc.com/2019/10/29/us-consumer-confidence-for-october-comes-in-at-125point9-vs-128-expected.html

It’s getting to be the best time of year for stocks, and the Dow could soon set a new high

The S&P 500 & Nasdaq both traded at record highs this past week because of better economic news, a better-than-expected earnings season, and hopes that trade talks will soon resolve the trade war with China. Many analysts are saying that stocks could keep setting record highs because of these trade talks with China. November is usually a good month for stocks, but December is the number one month. 76% of companies also beat expected earnings, which was definitely a main catalyst for the performance of the stock market. What is your take on this? Do you think these analysts are correct?https://www.cnbc.com/2019/11/01/the-dow-could-soon-join-other-benchmarks-at-a-record-as-strong-november-seasonality-kicks-in.html

Protest's effect on Honk Kong GDP

The protests in Hong Kong have have now cause 2 consecutive quarters of GDP growth with the 3rd quarter dropping 3.2% alone.  This is a dramatic shift for the Hong Kong economy and the local government has described the recessions effect on the city as devastating.  The slow down in growth has mainly been attributed to the on going protests for democratic freedoms that has been raging in the city for months.  City leaders fear that the recession will only worsen as protests continue. Vacancy rates in hotels in the city are above 60% and the tourist industry, a huge economic driver for the city, has been crushed.




https://www.bbc.com/news/business-50204696

The Push to Raise Minimum Wage

The fight for increased wage rates has been brought to employers by labor unions and community groups. After a successful effort, the minimum wage for affected workers have seen change. In Oakland, the minimum payment for hotel workers has been increased to $20, an effect from the strategies of these groups. The fight for increased wages was to keep up with rising prices in housing costs, in an effort to prevent workers from being evicted from their homes. Though union participation in the workforce has been decreasing, their impact is still significant in the job market. Will this rise in wage for this particular group cause relayed effects in other departments? Will we see a significant rise in participation within labor unions?

Push to Raise Minimum Wage Goes Local, at Airports and Hotels

The economy is in good shape, but two big clouds hang over it.

The U.S. economy is in good shape. Is this in favor of the middle, working classes and the poor? According to this article, the two big clouds hanging over the U.S. economic future are wealth and income inequality and raising the economy’s potential for growth through accelerating productivity.  Even though the unemployment rate is very low, but many of those counted as "employed" are "employed" in jobs that pay relatively little with few or no benefits,  little or no job security for fewer than the customary number of weekly hours.

5 million children to get face masks as New Delhi battles heavy pollution

New Delhi is suffering from such severe smog that the government is considering extreme measures such as shutting down schools, stopping construction work, banning trucks from the city, and imposing a rule whereby cars with odd and even number plates can only drive on alternate days. Anything above a 100 on the Air Quality Index is considered unhealthy, New Delhi's AQI is a sky rocketing high of 336. With Delhi as the capital of India, this has huge economic repercussions. A 2006 study reported that cars contributed to 72% of New Delhi's air pollution, so the government's plan to limit car usage may be effective, the question is if its practical? It could decrease output of businesses, and may cause a burden on a public transport system that is already stretched out thin. Moreover, just today, 37 flights were cancelled due to low visibility which causes further inefficiencies. This problem is not unique to New Delhi, Lahore, a city in Pakistan faces the same issue. Are the solutions posed by the government practical? 

https://edition.cnn.com/2019/11/01/asia/delhi-pollution-schools-intl-hnk/

US-CHINA TRADE WAR SEEMS TO HAVE NO END

Over the past couple of months, China and the U.S have been involved in an ongoing trade war between the two countries, Politics and Culture between these two countries have made negotiating even more difficult. "As far as substantial trade breakthroughs, on thorny issues like intellectual property and opening up the Chinese financial system to US banks - I don't think that will happen, in what's left of Trump's first term or in a second term if he wins one.,” “Without an election to win in 2024, I doubt that the president would even care to make it a priority of his administration.” 
This may never happen as it requires the intellectual property to be a public good and therefore tradable and exchangeable in banking systems. Opening banks in the U.S would solve this issue of trade but would put China at risk of a banking crisis similar to What their East Asian neighbor Japan experienced in the 1990s. Overall discussion may lead to a final conclusion if both markets have serious problems making the this possible in times of desperate impossibility of balancing the markets and recovering massive crashes in stocks and increases in trade deficits, only then in times of desperation will they settle on a deal to end the trade war.

https://www.forbes.com/sites/panosmourdoukoutas/2019/11/03/us-china-trade-war-will-never-end/#448c63ee6f58

The Fed is still cutting rates

It seems like we have become a broken record on this blog now as this is the third time the Fed has decided to cut rates since we started this class. So I am still a strong believer that we are using our safety net WAY before we actually need it and Trump is at fault for part of this. The reason the Fed is not associated with the government is that there shouldn't be any political pressure for decisions. Trump has done nothing but tells Powell and companions what a terrible job they are doing for not cutting rates harder and not cutting them earlier when realistically, cutting rates this early is using up one of our safety nets before we actually need it. This could all blow up right before the election next year or it is going to become a massive problem for Trump after he uses the strong economy to get re-elected (implying that he does get re-elected). If Trump and his staff are able to continue such growth then this will truly go down as the best economic presidency in the history of this country.

https://www.cnbc.com/2019/10/31/trump-rails-against-powell-day-after-fed-cuts-rates-for-a-third-time-this-year.html

Third-quarter economic growth is expected to be a tepid 1.6%, but markets could look past it

The article states that third quarter growth is expected to slow down to 1.6%. One of the biggest hits is coming from a slow down in business investment. We have discussed in class how a slight dip in investment can drive the economy into a recession. I have voiced my belief that economists who are insistent that there is a recession coming are a large problem. If the people who we see as experts are insisting that there is a recession coming, then consumers and investors are not going to invest. This will cause a huge decrease in the investment section of GDP, which could also be a large reason as to why our growth rate is expected to decrease.
Even thought the growth rate is decreasing, this does not mean that the US is in a recession currently or there is going to be a recession. The growth rate can slow down and then stay constant as well. I hope the markets are able to "look past the weak report" as the article says.