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It’s been an absolute sh*tshow since the US announced it would impose tariffs on $200B worth of Chinese goods last July. China responded with levies on goods originating in the US (mostly soybeans), and the two powers have been exchanging proverbial kidney shots ever since.
The most recent retaliatory tax from China took effect on Saturday and included a tariff hike (from 10% to 25%) on 2.4k goods. It comes on the heels of POTUS increasing tariffs following failed trade talks in DC last month.
But wait, there’s more
On Friday China announced a list of “unreliable entities” that it has threatened to blacklist. The hit list targets US companies that Beijing believes hurt Chinese firms. Translation: the restrictions are direct retaliation for the US’ condemnation of Chinese telecom, Huawei.
It appears that one of China’s target companies could be FedEx thanks to apparent “wrongful delivery of packages.” China accuses FedEx of diverting a number of packages meant for Huawei’s HQ in China. Shares of the global courier fell almost 2.5% on the news.
And, lest we forget that China holds the equivalent of an “Uno draw four wild card,” the option to withhold rare earth metals from the US.
Wrench, meet spokes
Seemingly out of left field last week the US announced that it would begin taxing goods imported from Mexico if the country did not put an end to illegal immigrants crossing the border into the US.
The pissing match between the US and China has wreaked havoc on financial markets. China’s announcement, along with POTUS’ plan to tax imports from Mexico sent markets plummeting on Friday to finish up the worst month of 2019. The S&P is down to December 2018 lows and the Dow suffered its sixth straight weekly loss, a feat that hasn’t happened since 2011.
How bad is it? Well, JPMorgan (ever heard of it?) economists believe things have gotten so terrible that the Fed will be forced to cut rates twice in 2019 to save us from ourselves.
The US Justice Department is expected to open an antitrust investigation into Google. *Cue the Law & Order theme song.*
Both the US DOJ and the Federal Trade Commission discussed ‘alleged’ anticompetitive misconduct occurring at Google. The two parties agreed that this would fall under the Department’s antitrust division … likely after a heated game of rock-paper-scissor (best out of three, obviously).
What’s the problem?
Pretty much all online marketing runs through large tech companies (think: Google and Facebook). How much, you ask? Google controls 37% of the digital advertising market, with Facebook capturing 22%. So, a f*ck ton.
Although US politicians have raised concerns about the power that large tech giants like Google, Apple, and Facebook hold, little has been done. Google was investigated by the FTC for allegedly stifling competition in the smartphone, tablet, and gaming device market, but the case was closed in 2013 without any action taken.
European countries haven’t taken the same laissez-faire approach to dealing with our tech overlords. In fact, Google was just fined $1.7B by the EU in March. The bloc accused the search giant of enlisting unfair advertising practices. Over the course of nearly a decade, Google has paid $9.2B to the European Union related to antitrust investigations.
PHARMA BRO, ESQ.
It shouldn’t come as much of a surprise that the guy who taught himself biology so that he could launch a pharmaceutical company found a way to run his biz from “Club Fed.” What’s more unclear is if his willingness to price-gouge pregnant women in need of his company’s life-saving meds was self-taught or his parents just did a really sh*tty job raising him.
Despite being outed by the WSJ for running his empire via cell phone from “the inside,” it appears to be business as usual for Shkreli who is suing execs of his former bio-pharma firm, Retrophin.
Pharma bro claims Gary Lyons, Retrophin’s chairman of the board, Stephen Aselage, the company’s former CEO, and Margaret Valeur-Jensen, the firm’s former top lawyer, illegally ousted him from the company he founded in 2014 as part of an elaborate scheme. The most hated man in America is seeking $30M in damages.
In true Shkreli fashion, the court filing makes it abundantly clear that inmate 87850-053 started the “biopharmaceutical company from scratch” and turned it into a “successful enterprise worth hundreds of millions of dollars.” The suit goes on to cite the defendants’ greed and jealousy as reasons for illegally and unceremoniously ousting pharma bro.
Life on the inside
Shkreli’s suit comes just days after a transfer from a minimum security prison in NJ to another facility in PA (with a stop at a Brooklyn jail in between) with presumably less reliable cell service …
IN OTHER NEWS
- Apple scrubbed the social media accounts for its iTunes service ahead of Monday’s World Wide Developers Conference. It’s widely believed that the tech firm will be shuttering the service, which has been the way the world has stored illegally downloaded music for the last 18 years. Three new apps are expected to replace iTunes. They will allow users to access music, podcasts, and TV/movies, respectively.
- Johnson & Johnson was ordered Friday to pay out another $300M in punitive damages to a baby powder user who blamed her asbestos-related cancer on J&J’s talc-based product. J&J’s total paid so far in damages related to talc products reached $325M, after a judge in NY awarded $25M to a woman and her husband earlier this month. The day of the NY ruling, a jury in South Carolina cleared J&J of liability in a similar case.
- With a June 20th IPO looming for Slack, the firm reported healthy Q1 growth. Revenue increased by almost 67% but the email killer lost $31.9M over the same quarter, a 28% increase from last year. As of April 30th, the startup’s paying customer base rose 42%, to 95K. With $1.1B in assets and little need to raise additional funds, Slack is pursuing a direct offering via the NYSE, following in the footsteps of Spotify.
- It’s been a bad year for Tesla in 2019. How bad? The worst ever. Company shares have fallen 43% to kick off the 2019 campaign, causing founder Elon Musk’s stake to take a $4.9B hit. Elon has a way to go before he has to worry about cash. With a net worth of roughly $19.7B, he ranks 46th on the Bloomberg Billionaires list.
- Amazon is buying part of ad tech firm Sizmek, according to an announcement from Amazon on Friday. Jeffrey Commerce and the gang said that Amazon Advertising and Sizmek have “many mutual customers.” The move comes as another step in Amazon’s efforts to take on Google and Facebook in the online ad space while giving Amazon access to dynamic creative, or the ability to better target ads based on user data. That’s right, those targeted ads are going to get more creepy and more accurate. The purchase comes as a welcome relief for Sizmek, which filed for Chapter 11 in March.
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