Companies Gauge the Coronavirus Impact

The Coronavirus outbreak has negatively affected many companies in the US. Broken supply chains and disrupted manufacturing has decreased demand for all products. The S&P lost 11.5% of its value this week. The worst week since the 2008 financial crisis. Microsoft announced that the virus has hindered computer and tablet sales, cutting their future forecasts. Apple said their sales in China dropped due to closing of stores. MasterCard also cut their forecasts because people are taking less international trips due to the fear of the virus. Investors are also less reluctant to lend them money. Jerome Powell of the Federal Reserve stated they would cut interest rates to incentivize spending and investing. He issued a statement saying these cuts would "act as an appropriate support for the economy" and "as a way to stem panic." Do you believe another economic recession is imminent?

https://www.nytimes.com/2020/02/28/business/economy/companies-coronavirus-economy.html

U.S. markets drop into correction territory, extending brutal week of losses

Recently, the Dow Jones has been on a constant decline. This past Thursday, it decreased by 4.4%. It has not seen a decline like this since the financial crisis in 2008. The Standard & Poor's 500 and the Nasdaq also fell. The Dow Jones is down nearly 13% from its recent high. It has been decreasing for 10 days, and it has not decreased this quickly since 2011. This only adds to the fears investors are already having because of the coronavirus. This fall has erased one third of stocks' gains since Trump's 2016 election.

Investors fears are only increasing since the first US case of coronavirus that could not be linked to travel or contact has just recently occurred in California. With this, companies and musicians have began canceling conferences and concerts due to fear of the virus. These companies stocks are being affected by this. This Thursday, Tesla's stock price fell 13%. Some Wall Street veterans believe that the coronavirus was an external shock that scared investors.

The US will average 1.25% growth for the first half of the year. While this epidemic has negatively affected the US economy, Europe is in worse shape. Germany and Italy run close to being in a recession, and they do not have the tools to fix it because of there previous weak growth and financial crises.

How much longer do you believe the coronavirus will continue to affect the US economy? Since many different countries are being affected by the virus, what do you think this means for our future?

https://www.washingtonpost.com/business/2020/02/27/stock-market-dow-coronavirus/

Goldman sees zero earnings growth for US companies this year because of coronavirus

According to Goldman Sachs, the earnings growth for the companies in the US will stagnant in this year because of the coronavirus. Goldman' s chief US equity strategist David Kostin said that " US companies will generate no earnings growth in 2020." This rapid spreading of the virus had cause the historic decline in the Dow Jones in which they dropped more than 8% since Feb 24. The S&P 500 fell about 8.6% and Nasdaq fell about 2.9%. Investors are still optimistic that market will bring it back up after the virus. but Goldman didn't think so, because the virus's impact on the supply chain had caused most of the big companies like Apple or Nike. So, with this virus going around the world, and stock markets declining in the past week, is this the start of another recession? Should people be worried?

https://www.cnbc.com/2020/02/27/goldman-sees-zero-earnings-growth-for-us-companies-this-year-because-of-coronavirus.html

Brexit to Boost Public, Private UK Investments

After having left the European Union to end the month of January, it appears that new certainty in the future of Britain will help boost re-investing, per Bloomberg. With the leave officially completed and new agreements begin to be worked out, confidence in the British economy has boomed. Boris Johnson wishes to do the same as private corporations, and also invest more into the country, with money that may have been used to help support the EU in the past. With British companies soon to reinvest profits into growing both in the UK and the EU, this will only help further demonstrate the positive aspects of why the UK has decided to leave.

Do you believe that company and consumer confidence will be enough to maintain a positive post-Brexit UK, or will the full ramifications of Brexit hurt these investments in the long run without EU membership?

The Country is Desperate for More Immigrants Under the Trump Administration

This article depicts and goes over the main concerns economists have when it comes to the future economic growth. The issue being that the United States needs more immigrants. Over hundred's of years, the country was built by immigrants and growth has been great because of immigrants but the net flow of immigration in the U.S. has been slowing down since 2007 and continues to drop rapidly since the Trump administration. On the opposite side of that, the baby boomer population is slowly hitting the retirement age and are drifting out of the work force. The combination of this fact, mixed with the statistics of severe drops in birth rates since, has economists concerned about the slowing labor force which will lead to significant drops in economic growth, production, and productivity. The National Foundation of American Policy predicts a 30% drop in immigration by 2021 and as a result, a 35% drop in the average annual growth of the labor force in the U.S.

Previous annual immigration numbers were at 1 million a year, whereas now, they have been cut by half (500,000). If this continues, it is predicted that the national GDP (gross domestic product) will drop by 700 million by 2030. The number one argument against immigration is that domestic wages suffer because of immigrants taking jobs, but the evidence behind that is limited. This is seen to only happen with a small population of the labor force that ended up dropping out of high school. Even with this being an issue, economists have proposed a simple different design can solve the problem.  The United States has a high supply of high-skilled workers and because of that, there are less and less low-skilled workers to do the lower level jobs. Over the years, the people that have been doing these jobs have been poor immigrants that came to the U.S. in search of a better life. With the slow-down of immigration, these jobs will be in more and more demand, without the supporting labor force to take these jobs, there may be an economic crisis. The article argues that with a continued immigration constrain, and a lowering fertility rate, the economy will suffer in the long-run and the nation's debt burden will increase. 

Based on this, what do you think would be the best way to go about avoiding the consequences of cutting immigration?

https://www.nytimes.com/2020/02/27/business/economy/immigration-economy-mulvaney-trump.html

Stocks trim earlier gains as coronavirus fears linger

The coronavirus continues to cause a plethora of problems for consumers and producers all around the world. As the stock markets and the indexes that represent them continue to fall, the market will begin to show many signs of adding to the global recession. As signals that show that a recession is coming have continued to go off, there is also little progress with containing the coronavirus. As the article describes it, the global supply chains have been hit incredibly hard as some of the largest exporters of goods have been hit hard, and no other countries are wanting those goods as the fear that they may bring over contamination. Which other signs outside of the stock market should we be looking at more closely now that stocks have in fact showed signs? Also, how can stocks recover from this shock?

Link to article- https://www.msn.com/en-us/money/markets/stocks-trim-earlier-gains-as-coronavirus-fears-linger/ar-BB10ocnq

Huawei Is Winning the Argument in Europe, as the U.S. Fumbles to Develop Alternatives

Huawei, the large telecom giant has been a topic of contention for most international governments. Whether they should side with the United States and reject Huawei from their networks or forgo U.S. warnings and decide to build new 5G networks with Huawei.

Both sides have received wins and losses. The U.S. has some success in getting Huawei banned from
Australia and Japan while Huawei has some success in getting permission to build 5G networks in the UK and possibly Germany with strict monitoring and other conditions. This is a problem for the U.S because the two European countries are close allies when it comes to intelligence-sharing and the worry that China will be given a back door to spy.The problem with this is that despite U.S. warnings, the U.S. has not come up with a cheaper alternative to Huawei. Nokia and Ericsson are alterantives but are more expensive and there are no American firm that have developed an alternative for 5G.

But a huge reason for the inclusion of Huawei in the UK and Germany is due to China being a critical trading partner and fear of retaliation from China. With the UK leaving the EU, their trading relationship with China will be a top priority along with the U.S. The UK will need to balance their relationship with both superpowers without alienating the other which will be harder to do. Germany's economy is mostly export dependent (ie. Daimler, BMW, Mercedes-Benz,etc) with a large portion of those exports going to China. This is a problem that many countries are facing: choose the U.S. and potentially be locked out of 5G advancement or Chinese retaliation on goods or choose to include Huawei and have 5G networks and Chinese goodwill or possible Chinese espionage.

https://www.nytimes.com/2020/02/17/us/politics/us-huawei-5g.html?auth=login-google1tap&login=google1tap

Post-Brexit Immigration Havoc

As post-Brexit immigration plans begin to be unveiled by the government, there are five new immigration laws that will affect workers. Low-skilled workers will not get visas under these plans, because the government is urging employers to move away from cheap labor and invest in staff retention and automation technology. Home Secretary Priti Patel said that the government wanted to "encourage people with the right talent" and "reduce the levels of people coming to the UK with low skills". The UK is suggesting the introduction of a points based system that would value immigrants with higher education and job skills over those who are low-skilled. According to the Scottish First Minister, Nicola Sturgeon, the impacts of the new immigration legislation would be "devastating" for Scotland.

 The population growth stalling in Scotland is one main argument for needing more immigration, as it would boost the working-age population and keep the economy going. The new immigration laws being imposed by Westminster will disproportionately affect Scotland because of their demographics. That is why the Scottish Parliament is proposing a different immigration policy as their situation is sufficiently different from that of the rest of the UK. Currently, migration policy is controlled by Westminster but Scottish ministers are advocating for extra powers to set up their own system. The proposed system would add a Scottish-specific visa to the immigration system. The requirements for the visa would be decided by the Scottish government and would assess applications before sending them to the UK government for security checks. Do you think the UK government will accept this proposal?

https://www.bbc.com/news/uk-scotland-scotland-politics-51558830

The State of New York Won’t Appeal T-Mobile Merger Verdict

New York Attorney General Letitia James said the state won’t obstruct the merge of T-mobile and Sprint.  This legal decision removes barriers between the cellphone carriers and their long-planned combination.

“After a thorough analysis, New York has decided not to move forward with an appeal in this case,” Ms. James said in a statement released on Feb 16th. “Instead, we hope to work with all the parties to ensure that consumers get the best pricing and service possible, that networks are built out throughout our state, and that good-paying jobs are created here in New York.”

In the Obama era, T-Mobile and Sprint talked about mergers but these negotiations ended in failure, in order to avoid monopoly advantages and the formation of a bastion of industrial interests. For mergers of large telecommunications operators, the competent authority will usually evaluate them carefully. Such telecommunications mergers are most often opposed. For example, AT&T failed to acquire Time Warner. In 2011, AT&T tried to acquire T-Mobile, but it failed to get approval to do so. In 2014, T-Mobile tried to sell to Sprint, but in the end, it was also blocked, due to a threat from the Federal Communications Commission (FCC).  In 2016, T-Mobile and Sprint started to negotiate again, but the two sides did not reach a consensus. With T-Mobile and Sprint now ranked as the No. 3 and No. 4 corporations in telecommunications, the merger would inevitably affect the overall telecommunications industry in the United States. The merger would attract great attention from US antitrust agencies, which have not ruled out examining it in more aspects.

However, T-Mobile and Sprint will have a set of persuasive legal arguments to convince the authorities. After the merger, New T-Mobile will have more network spectrum. In addition to the past 600 MHz and 700 MHz, Sprint's 800 MHz and an increase in speed will also be added. The speed of GHz is helpful to the development of 5G networks and access to business opportunities in the fixed-line broadband market. New T-Mobile promises to invest 30 billion U.S. dollars in building new networks and deploying new services in the next three years. It plans to increase the average national network speed by 15 times by 2024.

In addition, New T-Mobile emphasizes that its coverage network will help improve rural Internet access and reduce the digital gap between urban and rural areas. It is expected to open hundreds of new stores in rural communities, thereby creating more job opportunities, including network engineers, network installations employees, call center specialists, and new store staff, etc., by establishing in-state call centers to increase various customer needs.

On the other hand, gathering silver bullets to build a 5G network at a lower cost and scale will further promote competition in the telecommunications industry and reduce tariffs, ultimately increasing transmission speed and expanding services.  At the same time, fortunately, prices will decline. After all, China has a positive attitude towards the development of 5G mobile networks, even ahead of the United States. Whether the merger can change this pattern and reverse the backward situation will be a topic of concern to the US government.

The U.S. telecommunications industry as a whole will continue to witness intense competition among the three leading corporations (Verizon, AT & T and New T-Mobile). New T-Mobile subscribers will exceed 100 million consumers, and the total number of subscribers can compete with those of Verizon and AT & T. After the merger, the United States will deploy its widest-ever coverage, and its highest-capacity mobile network. 

What do you think is the impact of the merger of t-mobile and Sprint on the telecommunication industry in the United States? Is that good or bad?

https://www.wsj.com/articles/new-york-wont-appeal-t-mobile-merger-verdict-11581884506?mod=searchresults&page=1&pos=1