Media Navel Gaze: September 12, 2016
Fed comments (what else?) from the Boston president that suggested a hike is coming sooner rather than later sent markets in a tailspin with the Dow down more than 400 points to end the week off 2.2 percent (Brexit all over again) to close out at 18,085; Most markets tanked sending bond yields higher and keeping all waiting for next moves as we move into final two weeks of the quarter. Elsewhere:
- North Korea launched nuclear tests, increasing political tensions beyond the East, which may have contributed to market jitters;
- Wells Fargo took out large ads across the US last week in a media-wide mea culpa of sorts for creating fake bank accounts for customers to help generate fees which instead has generated bad will and fines;
- America paused to reflect on 9/11, some 15 years after the attacks with coverage seemingly growing dimmer;
- iPhone launched a waterproof and jackless No. 7, which at best got a meh;
- Facebook got more than a meh when it deleted (and then reposted) a post from a Norway publication that included the iconic photo of the young naked girl running from napalm bombs in Vietnam because it may have been seen as child pornography;
- Matt Lauer also took heat from what seemed to be just about everyone after an apparent lightweight interview with Donald Trump; and
- Serena fell from No. 1 in the semi finals, making way for a new champion (Kerber) at the top of the heap (which hasn’t happened in a while).
- In Mexico, Luis Videgaray stepped down as Finance Minister and has been replaced by José Antonio Meade, who held the position from 2011 through 2012. Videgaray played a lead role in Mexico opening its oil sector to private corporations after 75 years of being state-owned, but was also the driving force in organizing Donald Trump’s controversial visit to the country last week. No reason has been provided for his resignation.
- Brazilian President Michel Temer has appointed Grace Mendonça as Brazil’s new Attorney General. Ms. Mendonça is the first female appointed to President Temer’s cabinet, which has received much criticism for its lack of gender and ethnic diversity.
- Argentine President Mauricio Macri continues to face resistance on his tax increases in the utility and transportation sectors, which he implementing to shore up a primary fiscal deficit that had reached 6.1% of 2015 GDP. Macri this week earned a victory as the Supreme Court struck down a motion to cancel his 500% tax increase in the light/electricity sector.
- In Chile, public scrutiny continues to mount over the need for pension reforms in a nation whose pension retention rates and retirement benefits are among the world’s lowest. This week renowned Evangelical pastor Emiliano Soto, in the presence of President Michelle Bachelet and several high-ranking ministers, called for an overhaul of the pensions system while criticizing the current cost of healthcare.
End of Week Market Updates:
- Merval (Argentina): + 0.06%
- Bovespa (Brazil): - 2.71%
- IPSA (Chile): - 1.14%
- IGBC (Colombia): + 0.60%
- IPC (Mexico): - 2.78%
- BVL (Perú): + 0.10%