Trade Deal Optimism Wanes
Another day, another comment by another guy that changes perceptions of the future best deal ever made in the history of humanity. Robert Lighthizer, President Donald Trump’s trade guy, who Trump also happens to contradict on camera about China-related things, said yesterday that it was too early to predict an outcome in talks between Washington and Beijing. Either he’s being honest, as all public figures are, or he’s trying to not cause markets to jump too high too fast. He said that issues with China are “too serious” to be resolved with promises alone, and in so many words, there needs to be a way to enforce any agreement that is signed between the two countries, though there is no authority presiding over both the United States and China that would theoretically be able to do this. In any case, futures are down on “waning hopes for a trade deal”, so goes the media narrative.
Weight Watchers Loses 513 Million Pounds
Shares of WW (NASDAQ:WTW), formerly known as Weight Watchers International Inc, but which lost a bunch of weight in its name, just lost 513 million pounds (sterling), or $682 million in market cap overnight in an enormously successful instant weight loss plan centered on reporting dismally horrible earnings results to shareholders yesterday compared to what they were expecting. The stock was down 34.5% in its worst day since going public. Profit guidance was less than half of what analysts had projected. This isn’t totally out of the ordinary for this stock, which has been moving like a penny stock for the last 3 years, up over 2,500% since 2015, and now down 82% since topping out last July. This is a case of wild crazy optimism and some irresponsible forecasts by upper management misleading investors, because the income statement looks pretty normal without the wild predictions. Earnings are up 37% from 2017. That should not cause stock movements like this.
India Pakistan Mediation
Meanwhile, Trump says that he’s got the whole India/Pakistan thing under control, which would be arguably more important than any China trade deal, because any nuclear conflagration would probably be bad for markets, and also life on Earth as we know it, and also for the people and various other life forms caught in any nuclear fallout and such. In a rather Trumpian comment on the topic, the President said, “They have been going at it and we have been involved in trying to have them stop,” which explains everything. Pakistan has shut its airspace to all commercial flights, so if you’re going to Pakistan, good luck with that. India is mad that Pakistan won’t do anything about terrorists on its border with Kashmir, who killed 40 Indian police, so India bombed Pakistan, so Pakistan shot down Indian planes and captured an Indian pilot, which India wants back, and so everybody’s mad. Hopefully Trump can make them less mad at each other by Making India and Pakistan Friends Again (MIPFA). Or building another wall.
Korean Stocks Down On Failed Kim Deal
The best deal maker in the history of the world has failed to make a deal with North Korea. South Korean stocks are not responding well to Trump’s cutting short his meeting with North Korean All-Wise All-Knowing Supreme Leader Kim Jong Un in Hanoi, Vietnam, whom Trump called a “great leader” but didn’t cut a deal with him because Kim wanted the US to first end its sanctions against the country, which Trump didn’t want to do. South Korean stocks (NYSEARCA:EWY) are down with the Kospi falling 1.75%. North Korea doesn’t have a stock market, or much of anything really. Safe havens are up, including US Treasuries and gold (NYSEARCA:GLD). S&P futures (NYSEARCA:SPY) are down 0.3% and Nasdaq futures are down close to 0.5%.
Costco Dethrones Amazon? Sure
In another case of misleading headlines by the mainstream media, Fox Business has a headline out claiming, “Costco (NASDAQ:COST) Dethrones Amazon (NASDAQ:AMZN) as Internet Retail Leader, Report Says”. One would think that this means that Costco actually makes more online sales than Amazon, but this is not even remotely true. Rather, the first paragraph of the misleading article gives up the truth, namely, that 1% more Costco online shoppers are satisfied with customer service than Amazon shoppers, by a score of 83% to 82%, though customer satisfaction is down across the board. The report was compiled by the American Customer Satisfaction Index in its Retail and Consumer Shipping sector. Amazon is still the leader in internet retail, obviously.
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