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THE HEADLINES

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PLZ FIX

According to sources in the know, Secretary Steven Mnuchin is reviewing the Treasury’s report on currency manipulation (read: a country devalues its currency to make its exports more desirable) on the part of China. Insiders hinted that the report, which will be officially released next week, indicates no FX funny business. Despite the yuans recent slide vs. the dollar, Treasury analysts don’t believe that Beijing has been deliberately weakening its currency.

Of course, Mnuchin (and Donny Politics) have yet redline the deck. Before its release, the powers that be can edit the report at will. I said, sans-serif, God dammit! And we all know where The Donald stands, having accused China and Russia of FX meddling in the past.

The bi-annual “deep dive” is standard protocol, in fact, it is congressionally mandated. Mnuchin’s quants roll up their sleeves and open the kimono on US trade partners, sniffing out any sign of currency manipulation. Should there be so much as a hint of FX tampering, the Treasury would enter direct talks with the country and seek mediation via the IMF.

But this particular report drops at a critical crossroads, with US equity markets in a freefall, bond yields on the rise, and escalating tensions between the world’s two largest economies. The Nasdaq has dipped into a correction and the Dow was down more than 1,300 points over the past two days. Should the US accuse China of wrongdoing, markets would undoubtedly be spooked further by a potential currency war.

Because what’s better than one economic war? That’s right, two economic wars.

Water Cooler Talking Point: “No pressure, Steve.”

 

CHIP IN

Tim Cook and Apple are trying to keep things all in the family having shelled out $300M to buy a portion of Dialog Semiconductor, a European chip maker. Apple has been working with Dialog since the earliest iPhone, and apparently, they like what they see.

As part of the deal, Apple will be able to license Dialog’s power management technologies, while “acquihiring” 300 engineers to work on their own products. For the record, 300 engineers make up 16 percent of Dialog’s entire workforce. Apple has set aside another $300M for products developed by Dialog over the next three years.

With some of Dialog’s technology and workforce coming in-house, Apple is hoping to improve the battery life of not only its phones but also the Apple Watch. Battery life, if you’ve been living under a rock, is a major complaint that Apple users have had since the advent of the iPhone.

Water Cooler Talking Point: “Apple could be dabbling in Satanic sacrifices as long they can ensure that my iPhone battery lasts longer than 3 hours while I’m stuck at my third cousin’s high school graduation.”

 

IT’S WALLY’S WORLD, WE’RE JUST LIVING IN IT

Walmart has partnered separately with MGM and Eko, a startup video platform, to create original content, with the goal of making Wally World an entertainment hub. Wonder where they got this idea. The platform will live on Vudu an oft-overlooked streaming service that Walmart bought in 2010.

In other news. Walmart and PayPal are teaming up to allow customers to pay with cash from their PayPal accounts and also directly withdraw funds from their accounts within the Walmart store. There will be a $3 service fee per transaction, but there are no details as for how that fee will be shared.

This landmark deal will be the first time in PayPal’s twenty-year history that its users will be able to take cash out of their PayPal balance in a brick-and-mortar location.

Water Cooler Talking Point: “Soooo, like a sh*ttier version of Apple Pay … got it.”

 

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IN OTHER NEWS

• “Who you tryin’ ta mess with ese? Don’t you know I’m loco?” – Jay Powell, probably. President Trump upped the ante, calling the Fed ‘loco’ and blaming its rate raises for this week’s selloff.

 

• More and more companies and individuals are resorting to the pull out method. Turkish officials hinted that Jamal Khashoggi, a prominent Saudi journalist who has become critical of the Kingdom’s government, was murdered at the Saudi Arabian consulate in Istanbul. This has led to backlash including prominent figures in finance and economics backing out of a summit in Saudi Arabia dubbed “Davos in the Desert.”

 

• Billy McFarland, aka Fyre Festival Bro, is giving Martin Shkreli a run for his money. The conman was sentenced to 6 years in prison for his part in defrauding affluent millennials (and Ja Rule) of some $28M.

 

• It’s been a tough week to be a FAANG stock. First Google+, then a major selloff, and now this. Stolen Apple IDs were apparently used to steal customer funds in China via Alipay and WeChat. There’s no word on how many people we affected.

 

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