November 19, 2019
United States:
Trump’s Dollar Angst Overlooks Trade as a Bigger Factory Concern
“President Donald Trump’s complaints that a strong dollar is hurting manufacturing overlook a far bigger concern at America’s factories: his trade policies. At a meeting Monday with Federal Reserve Chairman Jerome Powell, “I protested fact that our Fed Rate is set too high relative to the interest rates of other competitor countries. In fact, our rates should be lower than all others (we are the U.S.). Too strong a Dollar hurting manufacturers & growth!” Trump tweeted late yesterday. One reading of Trump’s Twitter post suggests he wants the Fed to broaden its practice of targeting monetary policy at the domestic economy to include international competition. Another would be to indicate he’s unaware that tariffs and other trade restrictions are a bigger concern that the current level of the U.S. currency. According the most recent quarterly survey of the National Association of Manufacturers, trade uncertainties were the second-biggest concern on a list of challenges, with more than 63% of respondents ranking it their primary worry. The strengthened dollar ranked as eighth, with some 26% of companies mentioning it. It also showed that 70% of respondents picked attracting and retaining quality workers as the No. 1 challenge for the eighth straight survey.”
Europe:
U.K. Manufacturing Remains Weak as Brexit Drama Drags On
“British manufacturing improved slightly in November, according to the Confederation of British Industry, though the sector remains subdued amid ongoing political uncertainty at home and slowing global growth. The business lobby’s monthly survey published Tuesday showed a slightly more upbeat picture than in October, when factories were preparing for Britain’s expected departure from the European Union on Oct. 31, which ultimately failed to materialize. The country is now instead facing a general election in December, with the possible outcomes ranging from Brexit under Prime Minister Boris Johnson to a Jeremy Corbyn-led government which could nationalize large swathes of industry. Domestic and export order books improved but remained below their long-term averages, while stock levels were deemed more than adequate, the CBI said. Output expanded in only five out of 17 manufacturing sectors, with the slowdown particularly pronounced in motor vehicles and metals. Expectations for output now stand at their weakest since 2009.”
Asia:
Taiwan Bid to Lure Firms From China Paying Off, Government Says
“Taiwan’s push for its companies to invest in advanced manufacturing at home after decades of focusing on China is helping off-set the effects of Beijing’s trade war with the U.S., the government said. Taiwanese companies have pledged to invest almost NT$1.2 trillion ($39 billion) at home since the government initiated a program at the beginning of the year to attract investment from local companies with facilities in China. “We will see additional annual investments of NT$300 to NT$400 billion a year over the next two to three years thanks to the return of Taiwanese companies,” Minister without Portfolio Kung Ming-hsin told Bloomberg News last Thursday. “We are confident that we will see solid growth momentum for the next three to four years.” The plan to lure local companies to invest back home is one of two competing economic visions for Taiwan as voters weigh their choices ahead of the Jan. 11 presidential election. While incumbent President Tsai Ing-wen is pinning Taiwan’s economic future on developing industries such as advanced manufacturing, clean energy and defense domestically, her opponent, Han Kuo-yu of the opposition Kuomintang, advocates further removing barriers to doing business with China.”
Disclaimer: Analyst Certification -The views expressed in this research report accurately reflect the personal views of Mayberry Investments Limited Research Department about those issuer (s) or securities as at the date of this report. Each research analyst (s) also certify that no part of their compensation was, is, or will be, directly or indirectly, related to the specific recommendation (s) or view (s) expressed by that research analyst in this research report.
Company Disclosure -The information contained herein has been obtained from sources believed to be reliable, however its accuracy and completeness cannot be guaranteed. You are hereby notified that any disclosure, copying, distribution or taking any action in reliance on the contents of this information is strictly prohibited and may be unlawful. Mayberry may effect transactions or have positions in securities mentioned herein. In addition, employees of Mayberry may have positions and effect transactions in the securities mentioned herein.