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Good morning. Oil prices are rocketing as the U.S. cracks down on Iran, the Fed may have lost its edge and a new foldable smartphone is facing problems. Here’s what’s moving markets.
Oil prices are rallying once more after the Trump administration said it will not renew waivers that allowed countries to buy Iranian crude without facing U.S. sanctions after they expire on May 2. Iran has started intensive talks with partners in the Middle East in a bid to mitigate the fallout from the decision and has threatened to close the Strait of Hormuz, a key oil shipping passage. Saudi Arabia has said it’ll step in if Iranian oil exports crash. It could have an impact beyond just oil markets and is already causing some to make bets on an imminent rise in inflation and is keeping oil bulls bullish.
The Federal Reserve won't have Herman Cain joining their ranks after President Donald Trump withdrew his nomination, but the Fed still has plenty to ponder beyond its membership. Goldman Sachs thinks the Fed has lost its edge in forecasting against private economists in recent years, which has caused sharper reactions to policy surprises. The inverted yield curve has also lost some relevance, according to Bank of America Merrill Lynch. And some Fed policymakers seem resigned to running the risk of asset bubbles and other problems as they seek to keep the U.S. economic expansion ticking along.
Central banks get flak for distorting markets but may prove saviors if they help markets to a soft landing in the end. Two of the most dovish are in focus. The next Bank of Japan decision comes this week and most economists expect they will stay on hold, though many believe easing will be the next move. And the Swiss National Bank’s president thinks negative rates could get even more negative as the Swiss Franc heads for its worst month against the euro since 2017.
Samsung Electronics Co. responded to the concerns raised by a number of publications last week about its Galaxy Fold smartphone by delaying the release, seeking to avoid another public relations nightmare like the one caused by batteries in a former Galaxy incarnation catching fire. Seems like the tech just isn’t ready yet. Elsewhere in tech, rival Apple Inc.’s facial recognition software is being blamed for a false arrest in New York. There’s also a music streaming price war bubbling related to tech giants selling smart speakers and take a look at Huawei Technologies Co., where first-quarter revenue jumped nearly 40 percent.
Note that stocks in China were shaken up on Monday on signs the government is less willing to add more stimulus to support the economy. On Tuesday, Asian stocks were mixed ahead of a deluge of big earnings this week from the likes of Amazon.com Inc. and Facebook Inc. And Brexit is back, with Conservative and Labour lawmakers to get back into a room in another attempt to find a compromise.
What We’ve Been Reading
This is what’s caught our eye over the past 24 hours.
- How to hedge against trade war turmoil.
- Way more older people are working in the U.S. now than in the past.
- The cult Japanese retailer making billions breaking all the rules.
- Karl Lagerfeld-designed apartments in Taiwan are targeting the ultra-wealthy.
- How much CO2 being churned out on earth in real time.
- 85 percent of art in U.S. museums is by men.
- A short history of the influencer.
©2019 Bloomberg L.P.