Markets are on a trade-driven roller coaster ride. On Sunday, a Trump spokeswomen poured fuel on the trade fire by saying the President only regretted he was not raising tariffs higher. But then this morning, speaking on the sidelines of the G-7 summit in France, the President said the Chinese have called and requested a continuation of talks. “They want to make a deal,” he said. S&P futures whipsawed in response. Don’t expect this volatility to end soon.
My guess is Trump stands a better chance of getting what he wants out of Chairman Powell than President Xi. Former Fed Vice Chairman Alan Blinder, speaking on the sidelines of the annual Fed conference in Jackson Hole, Wyoming, this weekend called the trade war a called the trade war a “stagflationary shock”—which means an excuse to ease.
Meanwhile, if you missed it, be sure to read the Wall Street Journal’s Saturday piece on a many-months investigation that found thousands of products being offered by companies over Amazon “that big box retailers would ban from their shelves.” We’ve know for a long time that Big Tech played by different rules than the rest of industry. But that was once viewed as a good thing. Now, the press, politicians and the public are increasingly ready to force them to do what companies in the real world have always had to do: take responsibility for the stuff that happens on their platforms.
More news below.
The other big G-7 story this weekend was the appearance of Iranian Foreign Minister Mohammad Javad Zarif on the Biarritz conference’s sidelines, at the invitation of French President Emmanuel Macron. President Trump said he knew Zarif was coming, though he didn’t want to meet him personally just yet. Trump also said he wasn’t seeking regime change in Iran. RTE
Meanwhile, U.S. and French officials have reportedly come up with a draft deal regarding the tax that digital giants ought to pay. Trump has been threatening tariffs on French wine in retaliation for a new French revenue tax on the likes of Amazon and Facebook. The new agreement, if backed by Trump and Macron, would see France repay the difference between its tax and a new mechanism being drawn up at the OECD level (the late arrival of which is the rationale for the French tax in the first place.) Reuters
Deutsche Bank and UBS reportedly talked about a merger of their investment banking operations this year, though nothing came of it—hence the heavy cuts that Deutsche Bank is now putting into effect. WSJ
According to Axios, President Trump has repeatedly asked his officials to look into the use of nuclear bombs on hurricanes, to stop them hitting the U.S. Trump, who described the report as “fake news,” would not have been the first person to have this idea; the main problem is that it would most likely lead to the U.S. being battered by radioactive hurricanes. Axios
AROUND THE WATER COOLER
An increasing number of TV shows are reappearing on other platforms after being kicked out of their original homes. Why? Because, as Radhika Marya writes for Fortune, new cable networks and streaming services are hungry for content. And if that content comes with existing fans, all the better. Fortune
Brazilian industry is decrying the catastrophic Amazon wildfires, amid concerns over potential boycotts of Brazilian businesses. The wildfires are likely to be the result of illegal land-clearing, which may have been tacitly encouraged by the country’s far-right leadership. President Jair Bolsonaro is now making an effort to tackle the blazes, but trade groups are still worried about being targeted by global consumers. Financial Times
The conservative talk radio host and former congressman Joe Walsh will try to displace President Trump as the Republicans’ 2020 candidate. “I helped create Trump,” Walsh said, while also lamenting his own racist statements in the past. Walsh on Trump: “He’s nuts, he’s erratic, he’s cruel, he stokes bigotry.” USA Today
The ability of people to continue paying for stuff in cash has become a key campaign point in the current Austrian election season. Many privacy-conscious Austrians don’t like leaving records of their spending by using credit cards all the time (as is the case in Germany, too) and parties are now trying to outdo each other on the hard-currency front. Euractiv