Futures are DOWN going into this morning, and you can probably guess why…
Speaker Nancy Pelosi’s visit to Taiwan is creating a geopolitical showdown between the People’s Republic of China and the United States. And that spells trouble for the global economic recovery.
It almost certainly won’t come to any kind of direct military confrontation, unless someone makes a huge mistake. United Nations Secretary-General Antonio Guterres said “humanity is just one misunderstanding, one miscalculation away from nuclear annihilation.”
Does it seem a little weird if I’m rolling my eyes at that?
Let’s be real here. Both sides are in regular communication. There’s going to be a lot of posturing. And, yes, there’s always the possibility of a mistake.
But the endless doomerism and predictions of catastrophe get on my nerves. Again, it’s like constantly saying the dollar is going to collapse or that the Great Depression 2.0 is just around the corner.
It’s cheap. It’s lazy. And it’s also wrong. There are plenty of opportunities for growth even if we are heading into some economic turbulence.
I believe in constantly cultivating a Growth Mindset. And as part of that, I’m looking at who stands to gain from what’s going on.
The United States may be looking to rebuild its industrial base and is shying away from outsourcing production to other other countries. That’s the foundation for growth, not something we need to worry about.
Let’s keep in mind the federal government is about to provide $52 billion for chip production within this country, as well as offering generous subsidies to companies that will be building new factories here.
Yes, there may be some short-term turbulence. But it’s when the market declines that you can move into stocks that you can hold for the long-haul.
Trust the technical signals for short-term gain, look at the fundamentals for the long-term trades that will sustain you for decades to come.
It’s the one-two punch that leads to success.
No depression, no doomerism, no defeatism. Attack, attack, attack.
Any strategy that makes you money consistently is worthwhile.
Though many new traders believe that trading is primarily about indicators and tools, Chris maintains that it is at least 95% about emotional control.
This is especially relevant in this bearish, choppy market which has made the trading world extremely difficult.
Learn some pro tips to come back from your losses and stay in the game.
WORD ON THE STREET
Inflation Reduction Act, U.S. Bank Fined, and Musk Countersues Twitter
- Inflation Reduction Act – After Senators Chuck Schumer and Joe Manchin worked on the $739 billion Democratic spending plan, also known as the Inflation Reduction Act, the White House admitted yesterday that the plan will barely affect prices over the next 10 years and would only lower the Consumer Price Index .33% by 2031.
U.S. Bank Fined for Fake Accounts – Based in Minneapolis, U.S. Bank was fined $37.5 million by the Consumer Financial Protection Bureau for illegally accessing consumer credit reports and opening accounts without their permission. This came about as a direct result of pressure on its employees to meet required quotas for selling bank products.
A Federal Reserve Inflation Index hits 40-year high – The Bureau of Economic Analysis reported in its June analysis that the personal consumption expenditures price index for that month increased 6.8 percent from June 2021 – reflecting increases in both goods and services. This is the highest year-over-year increase since 1982.
Elon Musk Countersues Twitter – The litigation drama continues. The trial for Twitter’s lawsuit against Elon Musk will begin on October 17th and is expected to last five days. Investor Luigi Crispo, a Twitter shareholder, has also filed a proposed class action lawsuit to force Musk to go through with the deal. Musk himself countersued Twitter on Friday with a 164-page counterclaim. It’s not yet publicly available. We’ll keep our eyes open for more news on this… though knowing Elon, he might just tweet out the whole thing at any moment.
HOT SPOTS: What’s Going on in Geopolitics
- Venezuela Embraces Stock Market – Caracas is going capitalist. President Nicolas Maduro is skillfully taking advantage of geopolitical tensions to bid for help from great powers like Russia, China and even the United States. He’s also liberalizing the economy, leading Caracas Stock Exchange head Gustavo Pulido to comment that “the government has taken a 180-degree turn.” President Nicolas Maduro plans to sell off parts of the government’s stake in state-owned companies such as the Banco de Venezuela and a communications company. I suspect that former president and fiery socialist Hugo Chavez is doing a number of 360-degree turns in his grave.
British MPs plan to visit Taiwan – As tensions continue to mount in Taiwan, Britain’s House of Commons foreign affairs committee is planning its own visit to Taiwan later this year. The trip was originally planned for earlier but a COVID-19 scare forced a cancellation. With Speaker Pelosi’s visit, the stakes just got a lot higher.
US Kills Al-Qaeda Leader In Drone Strike – Al-Qaeda leader Ayman Al-Zawahri was killed in a drone strike approved by President Joe Biden. In a speech defending his decision, President Biden declared, “Justice has been delivered, and this terrorist leader is no more.
CUTTING EDGE: What‘s Happening In Tech
- Oracle Cutting Costs By $1 billion – Oracle set a goal to cut $1 billion in expenditures… and began by laying off employees. Top executives like CMO Ariel Kelman and marketing leader Juergen Lindner are also expected to leave the company. More cuts are anticipated in Canada, India, and Europe. This comes amidst the news that Oracle gained approval to buy medical-records company Cerner for $28 billion and signed a deal to store US user data for TikTok.
Google Can’t Limit Antitrust Lawsuit – Social media site Rumble scored a win in its ongoing lawsuit against Google. Judge Haywood Gilliam Jr. ruled that Google’s argument that the lawsuit should be split into three parts has no precedent. “Defendant does not cite, and the Court has been unable to find, any Supreme Court or Ninth Circuit authority ratifying this approach,” the judge said. Proceedings will continue later this month.
SEC Charges 11 In Global Crypto Scheme – The SEC filed charges against the creators of Forsage.io, another sign the regulatory agency is looking hard at cryptocurrency firms. According to the SEC, Forsage “operated as a pyramid scheme in which investors earned profits by recruiting others into the scheme” and “allegedly used assets from new investors to pay earlier investors in a typical Ponzi structure.”
FOR YOUR CONSIDERATION
The decision to cut Russia out of the world economy has led to a catastrophe for Western countries, especially in Europe. Cutting China out of the world economy is probably impossible. Whatever actions are done will cause enough harm on their own. The question is which diplomatic bloc can tolerate it – but pain is on the way.”
The big story this week is the diplomatic showdown with China. Markets are worried… but could there be opportunity in this catastrophe?
While suggesting caution in the short-term, Mr. X breaks down some of the companies that could benefit from government largesse as Washington gears up for long-term economic competition with China.