(Bloomberg) — It’s been an action-packed week here in San Francisco, with the global gang from APEC enlivening the city (and sparking a much-needed street cleaning). President Joe Biden and his Chinese counterpart Xi Jinping chatted amiably on the sidelines, a good sign. Xi said China wants friendship with the US and that his nation won’t fight a war with anyone, among his clearest remarks yet proclaiming a desire for peaceful ties between the world’s two largest economies. Bloomberg columnist Hal Brands isn’t convinced.
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Another bit of upside from the APEC meeting is that we may see less fentanyl hitting our shores. Biden and Xi agreed that Beijing will crack down on companies that make the chemicals that are its raw ingredients. The ubiquitous street drug that’s 50 times more powerful than heroin has been driving record rates of fatal overdoses stateside. Biden also said the US and Mexico were working to address the challenges posed by fentanyl trafficking as well as migration and border security.
The S&P 500 rallied for a third straight week, no doubt boosting the mood of 401k holders. The dollar saw its worst week in four months amid thinking that the currency has already peaked, with softer-than-expected economic data reinforcing bets the Fed is done with rate hikes. “The lesson of the past few years is that all good investors must be humble in their economic projections,” said Lindsay Rosner, head of multi-sector fixed income investing at Goldman Sachs Asset Management.
Earnings season ends next week and profits have clocked in around 4% higher year-over-year. Sounds good, right? Not so fast. While reporting its results on Thursday, Walmart expressed concern that high interest rates, dwindling savings and student-loan repayments could reduce consumer demand. That gloomy outlook may weigh on earnings reports still ahead from retailers Best Buy and Dick’s Sporting Goods.
SpaceX’s colossal Starship spacecraft exploded during its second major test flight, bringing an end to the second major test flight of Elon Musk’s deep-space launch system. Even still, Starship achieved new milestones during the launch and SpaceX, known for its iterative approach to rocket development, is likely to view the overall flight as a success. The FAA granted the company a launch license on Wednesday following months of regulatory reviews after its first test flight on April 20 ended in a mid-air explosion.
And lastly, the United Auto Workers closed in on approval of their contracts with Ford and Stellantis on Friday, sealing agreements that will deliver record pay gains and new plant investments. Full-time employees may also get two weeks of paid parental leave, paving the way for more work-life balance measures to feature in future negotiations.Enjoy the rest of your Saturday. We’ll be back tomorrow with a look-ahead to the coming week.
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