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tv   Boom Bust  RT  May 11, 2019 3:30am-4:01am EDT

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she's to look for common ground. this is broadcasting around the world and covering the world of business and finance and the impact upon a time to see i. know in washington we're glad you're on board here is what's moving in boston today. terrorists are booming following implementation today and markets are busting correspondent alex mchale of it she joins us today to guide us through the grim performance and what it means for the future of u.s.
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china trade talks and later as i.p.l. listing gets the green light and its debut full well it soon be slamming on the brakes. trading gets behind the wheel and gives us a plane around the street following the listing. a cliffhanger ending for the u.s. trade talks with china leaves our global report today as negotiators from both sides sit just 2 hours of talks before passing a decision on next steps to the presidential level after exiting that relatively brief round of talks earlier today u.s. treasury secretary said simply we are done adding that he and his chinese counterparts had constructive discussions meanwhile the threatened increase of u.s. tariffs on chinese imports from 10 to 25 percent took effect friday morning president trump has labeled an additional threat to apply that duty to another $325000000000.00 of chinese imports not yet covered for now the prospects and schedule for talks is as unclear as ever with president seeming ambivalent about
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the content and direction of the talks and chinese president xi concerned about appearances and backing down under pressure so daniel right now it seems where basically when we started this was the most anti-climactic ending to the week as possible right and if this is become a real life reality show then this is sort of the season finale where you don't find out who the winner is exactly so essentially they're just kicking the ball down the aisle and america has escalated china so that they will retaliate but for now it seems like the markets are actually rather content with this ending for now . right now for more in-depth coverage we turn to our correspondent alex mayhill of the church in toronto alex welcome. thank you now alex 12 o 1 am eastern time on friday u.s. tariffs on targeted chinese exports increased as threaten from 10 percent to 25 percent by all accounts china is not going to take these measures sitting down the government has already expressed deep regret over the new tariffs and his pledge to
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fight back what's the latest. as you guys are saying season finale but there's always another season coming around the turn usually there is it looks like the series isn't over when we're talking. this though what we saw today was that basically the u.s. hammering china with new sanctions china's common commerce minister said they're going to use count necessary countermeasures but he gave no details on exactly what china is planning on doing american officials were you know they were a little bit disgruntled they did not get what they wanted they were said that china was backtracking on its commitments and many people would agree it looked like things were moving in a certain direction and now will obviously it looks like they're not moving in that direction any more even a president trump said just last sunday you know what this does not have to necessarily mean this is going to be the last round of tariffs we're ready to toss more at china if necessary now keep in mind we're looking at 25 percent tariffs now
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$200000000000.00 the u.s. consumer is going to feel this 10 percent yeah there were buffers in the market all the they could have been mitigated but at 25 percent we're looking at u.s. consumers being hurt by these tariffs as well here's a chart graph basically to tell you what is going to happen here what's being hurt the biggest industries electrical machinery sound a t.v. equipment machinery in appliances furniture motor vehicle parts iron and steel goods we know that americans use all of the above and with a 25 percent tariff oh my goodness prices are going up the average american family of 4 could expect to spend $500.00 more if these terrorists do kick in and if is the big question what we're seeing here also is the fact that these tariffs are kicking at 12 a one and this includes ships that have not left port out of china takes 3 weeks for these ships to get here think about it there's ships of the ocean right now
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what's happening within the next 3 weeks this is a buffer zone my friends a buffer zone so things can change by the time those boats get to the states those tariffs could be gone if the u.s. and china does decide to continue with these. goshi asians don't call it over until that fat lady sings everything seems clear as mud right now you know so there is this the tariffs are in the price pipeline they could be canceled by the time ships may get here on the other side if there is if and when china retaliates i know we don't have specific but to specifics but what's a ballpark for what their reaction might look like a look we were to know that china retaliated with $110000000000.00 worth of tariffs against the us a product of being exported from the us to china but we know that really that's not that big of a thing just simply because china doesn't import as many u.s. goods as the goods going the other way around also china's use some of its legal abilities and baking it's just difficult for u.s.
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companies to operate in china slowing things down that's one of the big plays as well also when we're looking at china it's not over it's not just about tariffs here there's other ways china can do things that can drop its currency basically to mitigate what's happening and also don't forget about those treasury bonds china owns 1 point one trillion in u.s. treasury bonds that's something that they could put into the game as well and then we just reach a different level we're not hearing that from china right now again 3 weeks that looks like everything is over but it's not over and there's still room for negotiations america is playing hardball and china looks like it has about ready to hit back. america is definitely playing hardball here they've decided to implement this paris right after the golden week holiday when a lot of asian investors were actually caught off guard they were celebrating and everybody was feeling very hopeful and optimistic goading into a golden weekend may day in asia however the terrace came out over the weekend and
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a lot of the investors and traders were come to cost completely off guard so we now hear that canada also is trying to get its $0.02 and when it comes to these talks what can you tell us. well canada comes to canada prime minister trudeau called president trump earlier this week and he was basically asking president trump to can you get in there and ask for our 2 guys back we know that the chinese arrested 2 canadians people are saying that's in retaliation for canada arresting the wild way while the c.f.o. that was the big question here look at is all this we're talking about how this these trade talks are affecting the global economy another thing that's happening in canada canada looks like we're going to different way than the rest of the world our economy is looking pretty good and some stats came out according to statistics canada the economy added 101-061-0650 extension 0 jobs in april that's the biggest number of the country seen since 976 this is good news for prime
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minister justin trudeau who needs a lot of help the polls are saying that he is done and over with come october when the next canadian elections are but that's a long time just like we've these trade talks and nothing's over yet and we could see things turn around quite quite quickly in both accounts. a quick trip around the world with our g correspondent. thank you. thank you. let's take a walk around the world and see how the global markets are doing this week in the light of the trade drama most of the markets are down i will start off and moscow with the molex down 2.5 percent this was primarily led lower by a lot of the industrial names names like oil and gas and mining sectors now going over to aig they have had a very rough week as the entire market whiplash on the uncertainty of the u.s. china trade war in shanghai they were actually on trying to close down more than 5
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percent for the week but beijing at the last minute took effort to stabilize the market the yen strengthened and the next closed 3 point one percent higher on friday to end the week slightly down a little more than one percent the hung saying over and hong kong * follows mainland and they gained one percent following beijing statement but they still ended the week down more than 2 percent however moving on to japan and nikkei the market was down more than 3 percent on trade war worries the nikkei ended the week lower as cyclical names guys that are really heavily affected by macro economic changes they drag down the entire market the markets in asia were actually closed week in celebration of golden week investors were quite optimistic going into it and they had expected the u.s. china trade talks to be resolved soon but they were actually quite surprising cafard issued his tweet over the weekend unlike mainland japan was not reassured by beijing stabilisation and they did not rebound into the close moving over to india
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the sensex is down 3.9 percent lower this week clocking in their worst week in over 7 months several factors contribute to this continued decline including trunk's efforts to seeing around oil exports to 0 this will have a direct impact on india as iran is one of its main supplier. oil prices shot up to 6 months high impacting the broader indian market and the currency the market has also cautious ahead of the lok sabha elections leading to a high level of volatility moving over to australia the a.s.x. paired slightly better just down less than one percent for the week as a waits for the us china drama to clear up the market was quite volatile as australia is a commodity heavy nation and if the trade war continues many other large cap names will be impacted names such as rio tend to and for disk use metals quit and finally over to all shares over in south africa this was also down as macro headwinds weighed down on the economy annual inflation rate increased to 4.5 percent amid
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a sharp rise in fuel prices the trade war has depressed the global commodity prices and its local clock currencies coupled that with a decrease chinese demand for imports and that would throw african markets further off balance now let's turn things over to daniel take us through western europe and the americas danielle thanks christi moving quickly we see a big global trend this week see if you can spot it as a global trade and certainly resonates throughout world markets in europe we see the u.k. down for the week in germany the dax down in france also down moving quickly to the americas in colombia the cold down for the week in brazil also down for the week weakness across the americas moving to standard and poor's index down for the week new york stock exchange and nasdaq also down and completing the perfect perfect week of red arrows the toronto stock exchange or global exchanges down the global
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look at markets this week. time now for a quick break but hey here because when we come back over as i feel this thing finally gets the green light in its debut but will it soon be slamming on the brakes danielle shay a simpler trading gets behind the wheel and gives us a swing around the street following the listing and as we go to break here is a number that the closing bell. is this is a sticker from the open water bottle found in the stomach of the fish the brand is sponsor of the coca-cola company which sells millions of bottles of soda every day the idea was that let's tell consumers there are the bad ones there the litter bugs are throwing this away industry should be blamed for all this waste the company has
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long promised to reuse the plastic. so. that soon. their plastic. stay in your assessment projects funded. on the best that is the end of it for the team but for now the mountains of waste only grow while. we have a situation that is very new and that's why. it's like i feel like before the war were to when people were born and there was no go to school we're going to do so the boy it was through to the right of the world. as a medical man to be widespread to implicitly good code of people they. may need these these because they were just what you call the.
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as opposed to see on his attorney the name for you ok for one who doesn't get. what was your guy is a real if they give it to you they get out just enough to produce you post and it's with me it's your rights. that's the thought of you. if you achieve that it is that you.
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there's an interesting shift going on right now between the private and the public markets the average age of us companies that went public in 1909 was only 4 years old however in 2018 the median age of companies going private public was 12 years which means that they are 3 times older wiser and mature and that's supposed to be a good thing right companies are maturing and stabilizing before entering the public market where they are subjected to the obligations and the scrutiny of the world they have time to build themselves up and grow the business again management and operational experience before having to report to the millions of shareholders they are of the do sherry duty to but not necessarily it really depends on what camp your end for the company this phenomenon is a real big positive as that means that there is enough funding and capital to raise in the private market in order for them to grow they don't need to turn to the public markets to raise the necessary funds 2 decades ago this was not the case as the private markets were not so established so there was no way for
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a growing company to raise hundreds of millions of dollars in funding with a. debuting an i.p.o. now you have mega venture funds like soft bank and n.e.a. available to fund a series d. round if necessary for the private market this also this is also a really big positive because they're getting in at the ground floor and they're subsequently funding the company's growth at higher and higher valuations each time which means that they're capitalizing on most of the growth and value creation before the company even enters the public market and by the time it i.p.o.'s most of the growth has already been taking out think of the company like a child the private come arc of profits off the growth of the company from infancy stage before as a company matured into a teen it would i.p.o. and the public would benefit from the company's growth now as a teen is staying private so the bulk of its growth years are now only benefiting the private market by the time it i.p.o.'s there are only very slow steady growth ahead the public market doesn't get to see the teenage growth spurt years anymore
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the most recent examples of this where lift and snap chat it is almost like a 0 sum game developing between the private and the public markets as a private takes more of the public loses more a successful company will allow v.c. to over 10 times their initial investment over the years the public market however will only see maybe 50 to 70 percent return in that same time period and here to give us the latest on the most recent hyped up i.p.o. hoover is daniel shay's developer of options simpler trading welcome. thank you so much for having me so over i.p.o. today and this was hyped up for years and today they're off to a very disappointing start. yes that's correct so what i look at any i.p.o. particularly something like hoover that's been hyped up for quite a long period of time as a traitor for me what i want to do is i want to wait until that hype dies down and
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at that point that's typically what i'm going to love to get into the stock but not on the 1st. over priced at $45.00 which was already on the lower end of its offer range of $44.00 to $50.00 and it opened at $42.00 below its i.p.o. price and now it's struggling to stay afloat so the private market actually still gain from this because even at this current valuation it's still higher than their last round of funding so right now tell us about the early investors of how are they making out. so in this situation just as you were talking about earlier the early investors the early executives the investors the venture capitalists those are the people who are making exponential gains right now you know i mean they've been maybe even since 2010 but at the end of the day i mean if you're looking at it said dave you're looking to get in it you have to think about what you want to do with the stock so while those people were lucky they had good timing they were able
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to have this company fall into their law and so you know at the end of the day they also made the decision to invest in it you have to look at what you want to do with it and if you're thinking hey you know maybe i want to buy and hold this for the next 1015 years if you're looking at it as a difference of $5.00 or $10.00 in the share price then does it really make that much of a difference probably not. again on this point that christie was raising in the intro this increased a of a company when it goes to the i.p.o. what's your take on why that shift is happening and what the effect is is that it's having on these i.p.o.'s it's almost like the you get to the orange it's already been juiced. yes and i do agree with their take for sure but at the same time you know for the public that really didn't have the opportunity to get in in the beginning this is really the opportunity that they have now and so when you
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look at it and you say ok well the valuation has grown exponentially over the course of the past 910 years we didn't have an opportunity now is that opportunity so when you're looking at it you can say ok well if i'm interested in getting into this about $40.00 a share and holding it for 1015 years and if it grows to like you said you know if it grows 50 percent or 75 percent i mean for me that's still a good return on a long term investment so as an investor while the situation has changed you still have to look at what you're trying to get out of it and there's different ways to look at this to sort of counter your expectations here but yes a little bit this news just disappointing news is even worse than it looks when we compare i.p.o. results to other sort of tech peers ali baba facebook lift and snap the new york times pointed out that they all popped you know had this tech pop of roughly 1020 percent i should say after their i.p.o.'s why isn't delivering not seem to pop and
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that's designed it suggests there's more fundamental weakness that hasn't yet been processed in the prevailing market attitudes. honestly i think it has to do with a lift so i mean i think that lift was so hyped up the lift was the one that came in 1st you know out of the 2 companies and because lift has been in the news over the course of the past several weeks and all it has done is basically trade straight lower i think that it really tainted as i.p.o. and so people coming in now today looking out over they say who were lift their very similar we've seen what lift has done do i really want to put my money and it were and honestly i think that's what's happening here with over today and. one other thing happening this week is the strike that happened drivers going on strike do you think that had anything to do or how much did it have to do with these results today. oh absolutely i mean any type of negative news when
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a company is going out and having an i.p.o. that isn't helpful so you know you have a situation where a lift has i think it's about 30 percent lower than the initial i.p.o. price and then we're supposed to follow up with that pool was the trade wars situation that's happening this week plus the strike i mean all of that i think what it's going to do is bring down that initial price after the i.p.o. and what's going to eventually happen is that price is going to kind of level out and at that point if you're really interested in picking up some of which i am honestly but i want to wait for it to level out a bit. i think that's going to be the point where you can come in and do that but not on the 1st day. for the public market this is going to be a really interesting opportunity because then we actually get to see how grows from now we already know that a lot of value has already been extracted out of over by the private markets already and now they have an accumulated debt of i think $7000000000.00 of
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community losses so given that given the astronomical number that's a big number to have to dig themselves out of before they have to start growing again so for the public for the public market viewers how at what point is this actually worthwhile of an investment because that means. they cannot sustain this valuation for long. exactly and so i think that for me particularly as a technical analyst i love looking at the fundamentals as well but for me when you have a recent i.p.o. you do not have that technical chart pattern and you just have to give it some time and what i tell our traders in our trading room is when you're looking at a. in the i.p.o. you have to think of it from the standpoint of is this a company that you use is this a company that you believe in is this something that the younger generations such as millennial zx you know are using and going to continue to use in the grand
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scheme of it because if you compare it to something like amazon and netflix who weren't profitable for years you know you have lists and you have in that same situation doesn't necessarily mean that it's a bad buy just means that if you're going to invest your money in it you have to believe in it in the long run and i don't think there's anything wrong with that but from a technical standpoint for me i just have to wait until that price levels out before i can get a little bit more confidence and putting my money into it so we don't have to see if this is actually dead in the waters are not because we have seen a lot of i.p.o.'s that have been dead in the water once they i.p.o. so a lot of the earlier ones. there was also king digital and i like snap chat go pros those are some very big means i gotta go they got so hyped up. and it went up like 3040 percent and it just plummeted and some of them actually never recovered but
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you see like facebook facebook actually managed expect tackler recovery do you think the same thing. i do think that it work and pull off the same thing and i think that the smartest thing that they did was coming in at such a lower valuation because i know that initially they were talking about coming in much higher and then when they saw what happened with lift they decided to come in a lower number so i think that might have saved them at the end of the day. but you know for me i just have to have a little patience and i have to look at a couple of the other most recent i.p.o.'s like you're discussing i mean we've we've had zoom this year which is actually doing quite well beyond me so far it's getting really hyped up but again that's another one that all wait for it to kind of level back down and pinterest is also a great example and i think it's my favorite example because if you look at a chart of pinterest i think it's been out maybe 3 weeks now about if my memory serves me correctly but you know initially it had that move up higher directly and
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then it started to fall sunk down a little bit and now at this point it's starting to slowly shift higher and that for me is just the perfect spot to look to add some more. active option that's something training thank you so much for having being here yes thank you for having me. and german engineering and steel conglomerate thiessen crip has abandoned plans to split itself into 2 companies instead the some group will please proceed with an initial public offering for its elevator manufacturing unit the some group stock rose roughly 20 percent on news of that change of plans and after the company also disclosed that they expected proposed joint venture with tata steel of india to be effectively blocked by the european commission company management says the commission's conditions on that proposed deal which may remedy antitrust concerns would be deal breakers meanwhile the stock bounce only restored
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about half of the losses in peace and crops price since the plans to split were 1st announced. and that's it for this time you can catch boom bust on direct t.v. channel 321 dish network channel 2 a b. or streaming 247 on pluto t.v. or free t.v. channel 132 are as always had a sound that you think that conflicts must see you next time. during the great depression which i'm old enough to remember there was most of my family were unemployed working class there wasn't it was bed you know much worse objective listen today but there was an expectation that things were going to get better. there was a real sense of hopefulness there isn't today today's america was shaped by the
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turn principles of concentration of wealth and power. reduced democracy attack solo down engineer elections manufacture consent and other principles according to no on chomsky one set of rules for the rich opposite set of rules for . that's what happens when you put her into the hands of narrow sector of will switch will is dedicated to increasing power for chills just as you'd expect one of the most influential intellectuals of our time speaks about the modern civilization of america. join me every thursday on the alex salmond show and i'll be speaking to us on the world of politics small business i'm show business i'll see that.
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in 2040 you know bloody revolution to. demonstrations went from being relatively peaceful protests to be creasing the violent revolution is always spontaneous or is it. spilling into the former ukrainian president recalls the events of $24.00. those who took. invested over $5000000000.00 to assist ukraine in these and that will ensure a secure and prosperous and democratic.
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war a whistle blower's continues the u.s. charges a former intelligence analyst under the espionage act allegedly turned over classified information about washington's targeted assassination program to the media. coming up to a dispute. over the process that will to determine who takes over as the next commission president. to respond to donald trump's decision to run a further $300000000000.00 worth of imports from china marking another escalation in the.


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