The markets loved Donald Trump when he was talking deregulation and taxes. But they don’t care much for his actions on technology and trade.
Amazon took the biggest beating in the market yesterday, falling 6%, after the president again attacked the online retailer over the pricing of its deliveries through the Post Office. “Only fools, or worse, are saying that our money losing Post Office makes money with Amazon,” he tweeted. “They lose a fortune, and this will be changed.” Not sure I, or others, have enough information to check the president’s facts on this one. But I’m inclined to believe what my friend John Callan, a certified expert on USPS, told The Wall Street Journal, which is that it’s become a symbiotic relationship: “Amazon wouldn’t exist if it weren’t for USPS and now USPS wouldn’t exist if it weren’t for Amazon.”
Facebook also continued to get clobbered, and is now down more than 20% from its high—putting it in certified bear market territory. In an interview with Vox, CEO Mark Zuckerberg yesterday defended himself from those–like Apple CEO Tim Cook–who have criticized Facebook’s business model of selling its users to advertisers, rather than selling products and services to users. “I find that argument, that if you’re not paying that somehow we can’t care about you, to be extremely glib and not at all aligned with the truth,” Zuckerberg said. “The reality here is that if you want to build a service that helps connect everyone in the world, then there are a lot of people who can’t afford to pay.”
Zuckerberg went on to point that “a lot of media” have a similar advertising supported business model. True that…in many cases, these days, to their regret. But wait—does that mean Facebook is a media company?
Meanwhile, Snap took a swing at Facebook, creating an April Fool’s filter that copies Facebook’s look, but changes the text to make it look like Cyrillic–the Russian alphabet. And Elon Musk took an April Fool’s swing at himself—sort of. You can see it here. I’m not sure those invested in the stock, which dropped 5% Monday on fears that the company is falling far short of its Model 3 production goals, get the joke.
Asian shares fell slightly over Tuesday, while European markets—back open after a long weekend—also opened down. U.S. markets are, however, expected to open higher.
More news below.
China’s decision to impose duties of up to 25% on 128 American imports, such as pork and wine, elicited an angry reaction from the White House. “Instead of targeting fairly traded U.S. exports, China needs to stop its unfair trading practices which are harming U.S. national security and distorting global markets,” said spokeswoman Lindsay Walters, who blamed Chinese subsidization and overcapacity for the “steel crises” that prompted the U.S. to levy tariffs on China and other countries. BBC
Sky News Proposal
The extraordinarily complicated Fox-Sky takeover drama has taken another twist. To ease U.K. regulators’ minds over the Murdoch clan having too much influence, Fox has proposed splitting Sky News off from Sky, and Disney has even said it might step in to buy Sky News, whether or not its wider Fox takeover goes ahead. Everyone involved seems to think this will solve the issue—now let’s see what the Competition and Markets Authority says. Fortune
Walmart is partnering with MoneyGram International to launch a global money transfer service called Walmart2World. Just as its Walmart2Walmart service allows people to transfer money between store locations, the company thinks its global service will attract customers through low-ish fees—$4 to send up to $50, $8 to send between $51 and $1,000, and $16 to send up to $2,500. CNBC
General Motors will stop reporting monthly U.S. car sales and instead move to a quarterly reporting cycle. The company claims a 30-day snapshot makes little sense, as it makes it difficult to tease out real sales trends from short-term fluctuations, caused by things like discount programs. GM will also stop reporting monthly sales in China and Brazil, although it will provide monthly data to the Federal Reserve. Reuters
Around the Water Cooler
Home sales in Manhattan have fallen by 25% year-on-year. With prices no longer rising so strongly, buyers are getting pickier, and bidding wars are falling out of favor. “Even with New York real estate prices, you do hit a point in which resistance sets in,” Frederick Peters, CEO of brokerage Warburg Realty, told Bloomberg. “People are very anxious about overpaying.” Bloomberg
The Financial Times has a profile of Erkki Liikanen, the outgoing governor of the Finnish central bank. Why? Because Liikanen is a potential successor to European Central Bank chief Mario Draghi. Germany’s Jens Weidmann is the most likely candidate, but Liikanen is now looking like a serious centrist contender. “I want to have an impact on the decisions. I want to work for the solutions,” he said. FT
Facebook has been archiving videos that users uploaded but decided not to publish and tried to delete. The company says the issue was caused by a bug and insists that the videos were never shared publicly. It’s a small thing but it undercuts the social network’s trustworthiness—one of many issues dogging Facebook at the moment. TechCrunch
Amber Baldet, who was heading up JPMorgan Chase’s Quorum blockchain team, is setting up her own business. The details of that new company still aren’t out there, but an internal JPMorgan Chase email stated that Christine Moy would succeed Baldet as program lead for the bank’s Blockchain Center of Excellence. Fortune