Kristal Weekly Feed | 25th November 2019

In a hurry? Here’s a short summary of some major global headlines over the last week.

Positives

• U.S. consumer sentiment hit its highest level in four months as rate cuts boost optimism
• China is considering investing $10 billion in Saudi Aramco’s mammoth IPO

Negatives

• The world’s best-performing stock of 2019 just lost 98% of its value
• The US-China trade war could get worse; business world on edge

Now, for more detail.

Positives

1. U.S. consumer sentiment hit its highest level in four months as rate cuts boost optimism

What You Should Know

According to Bloomberg reports, the U.S. consumer sentiment reached its highest level, landing between 94 and 97.5, since July’s 98.4 index as Americans grew less worried about tariffs and the Federal Reserve’s rate cuts took hold. The increasingly optimistic spending outlook among Americans has driven the November growth as recession fears have waned from their summer peaks, and the Fed’s three rate cuts have encouraged greater borrowing among consumers.

What You Should Look Out For

The upward momentum is likely to continue into December as spending picks up, Surveys of Consumers chief economist Richard Curtin said. He also added that personal spending will be energized by record favorable evaluations by consumers of their personal financial situation, with gains expected across the entire income distribution, net increases in household wealth, the renewed appeal of price discounting, and reduced mortgage rates.

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2. China is considering investing $10 billion in Saudi Aramco’s mammoth IPO

What You Should Know

According to Bloomberg reports, the Chinese government-owned entities are considering investing $5 billion to $10 billion in Saudi Aramco’s mammoth initial public offering. Saudi Arabia has been seeking foreign governments to buy into its historic offering and attract additional investor interest. Simultaneously, China President Xi Jinping has been looking to boost the country’s international reputation amid slowing economic growth.

What You Should Look Out For

According to Bloomberg, Aramco’s public debut is a linchpin in the Saudi government’s plan to shift economic dependence from oil. Proceeds from the offering are expected to go to the nation’s sovereign wealth fund, which holds assets managed by SoftBank and Blackstone.

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Negatives

1. The world’s best-performing stock of 2019 just lost 98% of its value

What You Should Know

Chinese marble miner ArtGo Holdings that was considered to be the world’s best performer with more than $1 billion in market cap, crashes 98% in Hong Kong trading overnight after MSCI decides not to add it to its foray of indexes. This happened after the shares had skyrocketed 3,800% for the year.

What You Should Look Out For

According to reports, this looks to be pure speculative trading banking on validation from MSCI.
And this only might be an add to the macroeconomic picture which isn’t set to improve in Hong Kong anytime soon as the region entered its first recession in a decade after October data showed a second consecutive quarter of GDP contraction.

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2. The US-China trade war could get worse; business world on edge

What You Should Know

The US-China rivalry seems to get even more intense. And that is keeping the business world on edge. The “phase one” agreement with China that US President Donald Trump promised in October has yet to materialize, leaving businesses more uncertain about what comes next.
The corporate executives, academics and politicians who descended on Beijing this week to discuss the state of the economy seemed a lot more unsure about the outcome of the trade war, which now is feared will be dragged into 2020.

What You Should Look Out For

The former US Secretary of State, Henry Kissinger said on stage in Beijing that the United States and China are “in the foothills of a Cold War”. He warned that an unresolved conflict could lead to problems “even worse” than when World War I broke out just over a century ago.

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