(San Francisco)

Investors in Facebook, and possibly tech more broadly, need to be worried. New news has broke which says that Facebook has been sharing its data with China. The company has been sharing data with device makers like Huawei, among others. The news comes just at a time when fury over Facebook’s data policies have caused a global uproar among the public. According to the Financial Times, “Facebook shared user data including information on religious and political leanings with the device makers, and personal data collected from users who had asked for it not to be shared with third parties”.

FINSUM: We don’t know if there are legal ramifications for this, but it will certainly only add weight to the current push to subject the tech industry to greater regulation.

(Houston)

Oil has been doing very well of late. All of our readers have probably noticed it at the pump. Brent crude is currently trading around the $80 per barrel market, and all parts of the oil sector are excited after a multi-year slump. However, the market has two big problems on its hands. The first is China’s secretive oil reserves, which could be used to push prices down if the Chinese start pushing their oil into the market. Secondly, The US oil industry wants to increase output significantly and has asked OPEC for a 1mbd hike, which would once again lead to an oversupplied market.

FINSUM: We acknowledge that oil is doing well, but we are worried it will be hard to maintain current pricing because it basically relies on an oligopoly structure (cooperation on price) which we don’t think is ultimately tenable.

(Beijing)

It looks like Trump’s efforts to put pressure on China over trade might be paying off. In what we think looks like a significant concession, Beijing has just offered to buy an extra $70 bn of US goods if Trump agrees not to impose the tariffs he has threatened. Trump has said he wants China to cut its trade surplus with the US by $200 bn. The $70 bn would mostly go to US agricultural products, energy, and manufactured goods.

FINSUM: China just made an offer that amounts to over 33% of what Trump demanded. That seems like a pretty good step.

(New York)

Safe 5% yields sound very enticing right now don’t they? Well, they are actually not as hard to find as you think if you take a broader perspective. That perspective is to look at standard municipal bonds and examine their real-world yields, or how they compare to taxable bonds. For instance, for a couple living in California with a $250k per year income, a municipal bond yielding 3.0% is equivalent to a taxable bond yielding a whopping 5.8%. This is because of the new tax system brought in by Republicans. One muni expert comments that “I would argue that munis are more attractive than they’ve ever been because, with the loss of various deductions, including SALT, one’s taxable income is higher than it’s ever been”.

FINSUM: This is a very good insight and one to which HNW individuals and advisors need to pay attention. Once investors really come around to this, it could spark a muni bond run.

(New York)

One of the key story lines that has been driving global equities gains over the last year and a half is that economic growth has finally returned to all corners of the world. Yet just as that story was becoming very believable, it is starting to fade. Global benchmarks for measuring growth have fallen undeniably since January, especially in Europe, and inflation is cooling in developed economies, both signs that the boom in expansion might have come to an end. Everything from shipping costs to copper prices have fallen as demand has waned.

FINSUM: Are we headed towards a global recession? It is always hard to forecast, but it seems as though we may be.