- China Moves to Interfere With TikTok Sale
- Nestle Stocks Up on Peanut Allergy Treatment
- FAA Approves Amazon Delivery Drones
- The Fed’s New Strategy
China Moves to Interfere With TikTok Sale
China issued new export restrictions this weekend, that could impede the sale of TikTok and I JUST WANT THIS ALL TO BE OVER SO I CAN STOP TALKING ABOUT THIS STUPID APP.
The export list, which has not been updated in almost 12 years, now restricts the export of several new technologies, including TikTok’s video recommendation algorithm that thinks I want to see 35-year-old men arguing about Star Wars.
With the new restrictions in place, TikTok-parent ByteDance will likely need the approval of the Chinese government to sell the app to a US company. (Good thing the US and China are on great terms right now… right?)
On Saturday, China’s state news agency featured commentary from a Chinese professor, who said ByteDance would need a license to sell its giant pain in the ass to a US company.
“If ByteDance plans to export relevant technologies, it should go through the licensing procedures,” said professor of international trade at China’s University of International Business and Economics, Cui Fan.
“It is recommended that ByteDance seriously study the adjusted catalog, and carefully consider whether it is necessary to suspend the substantive negotiation of related transactions, perform the legal declaration procedures and then take further actions as appropriate.”
The timing of all this malarkey makes China’s intentions loud and clear. They want to complicate the sale of TikTok.
But it remains to be seen if this is an “asking for a plus-one the week before the wedding” complication or a “bringing my six snake-worshipping wives to the wedding” complication.
Beijing could be simply moving to raise the price on the sale as a middle finger to everyone involved, or they could be trying to block the sale outright. Then again, they may just be waving their cucumber around to show everyone how big it is.
ByteDance responded to the news Sunday, saying “the company would strictly abide” by the laws. (To which the Chinese government responded: “lol. Yes, we know.”)
“We are studying the new regulations that were released Friday,” said ByteDance General Counsel Erich Andersen said in a statement. “As with any cross-border transaction, we will follow the applicable laws, which in this case include those of the US and China.”
Nestle Stocks Up on Peanut Allergy Treatment
Nestle is buying a biopharmaceutical company that makes peanut allergy medication, presumably to lace their potentially deadly Peanut Punch with life-saving medicine so everyone can enjoy it.
The food & beverage giant says it’s agreed to buy Aimmune Therapeutics at $34.50 a share, representing a 174% premium to its closing price Friday.
As we reported in the newsletter of record, One Last Thing, Aimmune Therapeutics won approval for the first-ever treatment of peanut allegories. (Who says we’re not the newsletter of record!? We record stuff all the time. Literally five minutes ago, I recorded my dog snoring.)
Aimmune’s Palforzia is the only peanut allergy treatment approved by the FDA to help reduce cases of peanut-induced anaphylaxis in Dungeons & Dragons players, theatre kids, and that one accident-prone child in every class that the universe seems to have it out for.
When the drug was approved earlier this year, Aimmune estimated that the drug would cost about $10,680 a year and could generate annual sales of up to $1 billion in less than a decade. (Unless some other dorks come up with a cure for peanut allergies before then.)
Aimmune Therapeutics stock (AIMT) skyrocketed after the announcement, surging more than 170% in the morning trade.
FAA Approves Amazon Delivery Drones
Amazon announced this afternoon it has won FAA approval to land giant flying robots in your front yard.
The FAA approval gives Amazon broad entitlements to operate a fleet of airborne drones to bring you cools stuff, things, and paraphernalia.
Amazon says it will use the certification to begin testing customer deliveries to ensure the giant robots won’t explode or helicopter a kid’s head off before rolling out on a larger scale.
“This certification is an important step forward for Prime Air and indicates the FAA’s confidence in Amazon’s operating and safety procedures for an autonomous drone delivery service that will one day deliver packages to our customers around the world,” said David Carbon, vice president of Amazon’s giant flying robots division.
“We will continue to develop and refine our technology to fully integrate delivery drones into the airspace, and work closely with the FAA and other regulators around the world to realize our vision of 30-minute delivery.”
Of course, Amazon isn’t the only fleet of giant flying robots in town. Last October UPS received approval to operate its drones like an airline. And Google-sister company Wing won FAA approval to make commercial deliveries with flying robots in the US.
Halt, citizen! I am here to deliver your paperback copy of The President is Missing, an action-packed thrill ride about a humble US President who saves the world from Russian-sponsored Jihadi Terrorists, written by Bill Clinton.
In Other News
ONE LAST THING
The Fed’s New Strategy
By Choose Yourself Financial Editor James Altucher
It’s a mixed bag out there, and I’ll tell you why.
This past Wednesday, the Investors Intelligence released its latest survey of stock market newsletter writers — and the number of bullish writers rose to 60% from 59.2% the prior week.
Let me give you some background on the Investors Intelligence reading.
The Investors Intelligence survey studies more than 100 newsletter writers and analyzes their views of the market. The survey is based on contrarian propositions — meaning that traders should act the opposite of what most newsletter writers are doing.
Think of it like this… if ten people are in a canoe and too many sit on one side of the canoe, the boat flips over.
The same thing happens in the stock market. If too many investors are bullish and we run out of bears to convert to bulls, investable money dries up, and stocks run out of upside momentum and sell-off.
Now, according to the folks that compile the Investors Intelligence survey, when the number of bulls exceeds 60%, traders need to be extremely cautious when adding additional long exposure.
Note: This is code for a sell-off is likely on the horizon.
But wait, because while the Investors Intelligence survey tells traders to be cautious, the Federal Reserve just did something that tells a VASTLY different story.
The Fed Wants You to Buy Stocks
Last week, the Federal Reserve told Wall Street about its new strategy to boost inflation. And their plan is pretty simple – the Fed plans to keep rates at or near zero for the foreseeable future, and even when the employment rate sinks back into the low-single digits, the Fed will NOT preemptively raise rates.
According to Ex Fed Chairman Ben Bernanke:
“Under this [new] strategy, the Fed will not take any steps to cool the labor market unless there is clear evidence of inflationary pressure.”
Ben’s comments are code for “the Fed will let the labor (and stock) market run full steam ahead!”
Look, here’s what you need to understand.
In the past, the Federal Reserve would raise rates when inflation began to rise, or the unemployment rate sank into the low-single digits. The Fed reasoned that they always wanted to get ahead of an inflationary spike. And by preemptively raising rates, the Fed believed they could stay one step ahead of the market.
Unfortunately, based on how the Fed measures inflation, which differs from how every family in America views inflation, the Fed’s goal of 2% inflationary has been an unattainable target. So, the Fed will now sit back, adopt a wait-and-see attitude, and allow inflation to creep higher.
How high is anybody’s guess. But the bottom line is low-interest rates make two things crystal clear.
- Buying real estate will remain attractive.
- Near-zero interest rates mean investors must invest in stocks if they want any return on their cash – and this is BULLISH for stocks over the long term.
Ok, let’s put this all together.
Based on the percentage of bulls in the Investors Intelligence survey, we should expect stock market volatility to spike higher soon – and this means a bout of stock market selling is just around the corner.
However, based on the Fed’s new strategy, it’s equally likely that the bull market in stocks is nowhere near over. And as crazy as valuations have become in some market segments, they may be about to get even crazier!
Closing Data for Today
|S&P Index 500||3,499.20||↓ 0.25%|
- Warren Buffett’s Berkshire Hathaway buys stakes in 5 Japanese investment companies.
- Mutual funds managed by women are outperforming those managed by men this year, according to new research from Goldman Sachs.
- GameStop stock surges 22% after Chewy co-founder takes 9% stake.
Editor, One Last Thing