The U.S. and China Finally Sign a Trade Deal!
It’s the Five on Friday, where we bring you the biggest market stories of the week, including a new trade deal, Tesla breaking records, Netflix’s Oscar ambitions, Disney’s dominance, and Spotify’s pet playlist.
Jan. 17, 2020
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The Quick Fix
#PhaseOneDeal — The U.S. and China have signed an agreement to pause the trade war that has weighed on the global economy for nearly two years.
#Tesla500 — Electric car maker Tesla (NASDAQ: TSLA) blew past the $500 mark for the first time ever this week, as Elon Musk’s company goes from strength to strength.
#NetflixGoesToHollywood — Netflix (NASDAQ: NFLX) has been on a good run in 2020 so far with the streaming giant securing more Oscar nominations than any other studio on Monday.
#DisneyDownloads — Global mega-brand Disney (NYSE: DIS) saw more success with its streaming service, Disney+, with 41 million app downloads in 2 months.
#AndFinally — Ever worried about what to do about leaving man’s best friend at home alone? Spotify’s (NYSE: SPOT) new podcast and playlists mean you need not worry anymore.
In the wise words of legendary British ’90s boy band 5ive: “I know it’s not much, but it’s okay, we’ll keep on movin’ on anyway”
Will this deal work?
That seems to be the sentiment of many this week after the U.S. and China signed an agreement on Wednesday to pause the trade war that has weighed on the global economy for nearly two years. The deal leaves in place tariffs on hundreds of billions of dollars of Chinese imports. However, it does offer some relief in the placement of stricter intellectual property rules, the stability of the Chinese currency, and a pledge by China to purchase at least $200 billion in U.S. goods over the next 2 years. Still, analysts are concerned that China may not be able to meet these pledges and that the Asian powerhouse has been slighted somewhat by the deal. President Trump said he would agree to remove any remaining tariffs once the two sides had negotiated a “Phase 2” agreement. For now though, the average American will breathe a sigh of relief that a deal is done, however minimal.
Bet you didn’t know
A recent report stated that the trade war with China has cost 300,000 jobs in the U.S. through September 2019.
Electric car maker Tesla blew past the $500 per share mark on Monday, marking the next stage in the company’s growth.
Will Tesla’s run continue?
Tesla achieved this feat for the first time this week after analysts set a price target of $612 and claimed that the company can reach a ‘critical scale’ to support positive cash flow going forward, even with its massive growth ambitions. The jump confirms that Tesla Motors is now the most valuable U.S. car manufacturer of all time and is worth more than Ford (NYSE: F) and General Motors (NYSE: GM) combined. Tesla stock is up more than 50% year-on-year and has lofty expectations to live up to. However, its traditional issues with meeting demand may have been taken care of with the success of its new Shanghai Gigafactory and a fourth European location on the way. Tesla broke its delivery record in 2019 with nearly 370,000 units and will look to kick on from this momentum in 2020.
Bet you didn’t know
Want to know the real reason for Tesla’s success this week? Farting cars. CEO Elon Musk teased a ‘fart’ feature in Tesla vehicles this week. I’m starting to think that Musk is the light in the dark that we all need in these troubling times.
Netflix stock has been on the rise this week as it looks to put a roller-coaster 2019 behind it and focus on its potentially award-winning content
Can Netflix win an oscar?
Netflix shares jumped on Monday after the streaming giant nabbed more Oscar nominations than any other studio. The company’s movies received 24 nominations in total, with ‘The Irishman’ receiving 10 nods, including Best Picture and Director, while ‘Marriage Story’ is also up for the coveted Best Picture prize. The main value of a Best Picture Oscar to Netflix would be the prestige that comes with it, and its ability to draw in A-lister actors to work on projects with in the future. A big win would give it a real advantage over its streaming competitors in a year that will see its status as the ‘king of streaming’ challenged by a plethora of challengers, most notably Disney. Some investors might question the studio’s obsession with winning a prize which has lost much of its value in recent years. However, this is the same studio that expects people to sit through 200 minutes of a 76-year old CGI Robert DeNiro hobbling around, beating up mobsters, so a 3.5-hour long ceremony should be no problem for them.
Bet you didn’t know
The very first Oscars award ceremony in 1929 only lasted a blissful 15 minutes. Those were the days.
Despite only becoming available halfway through the quarter, Disney+ was the most downloaded app in the U.S. in Q4 2019.
Disney’s success is Roku’s gain!
Not only was it the most searched term on Google in 2019, but the Disney+ mobile app has also been downloaded nearly 41 million times in the space of 2 months, earning the company an estimated $100 million. It was also the most downloaded app over the holiday period with more than 30 million hits — double its next nearest competitor, TikTok. The streaming service’s success is also having a knock-on effect within the sector. As Disney’s inexorable march towards world domination continues, brand-agnostic streaming service Roku (NASDAQ: ROKU) seems to be riding the coat-tails of the House of Mouse’s download success. The stock rose this week after analysts predicted that the ever-increasing Disney+ subscriber numbers will most likely cause a jump in Roku users too. However, we will have to wait until the Q4 earnings to see, as the streaming wars look set to hit a critical stage in 2020.
Bet you didn’t know
Disney-produced films account for about 33% of the total U.S. film market in 2019.
Fret no more for your poor, lonely pooch, as Spotify has made playlists and a podcast for dogs to listen to in their owners’ absence, after finding that nearly 74% of UK pet-owners play music for their animals. The Swedish audio-streaming business announced this week that it had launched a podcast featuring soothing music, “dog-directed praise”, stories, and messages of affirmation and reassurance narrated by actors to alleviate stress for dogs who are home alone. Sadly, Snoop Dogg is not one of the narrators, and criminally, the 2000 hit ‘Who Let The Dogs Out’ by Bahamian pop group Baha Men is not said to be included in the playlist either. According to Spotify, 42% of pet owners claim that their pets have a favorite type of music, while 25% claim that their pets dance along to the beat.
Who actually needs this?
As a man with two very spoilt dogs at home, I can safely say that I really do appreciate having something for my dogs to vibe to while I’m not around. I just wish Spotify was as thoughtful when picking out my preferences. For the last time, I don’t want to listen to ‘Panic! At The Disco’! — stop suggesting it.
Bet you didn’t know
There are an estimated 50 million songs on Spotify and I still can’t decide what to listen to.
The Week In Numbers
will be earned by Elon Musk if Tesla stock reaches and holds a value of $100 billion.
was pledged to small businesses in India by Amazon (NASDAQ: AMZN) CEO Jeff Bezos this week amidst protests during his visit to the Asian country.
is the threshold passed by Google (NASDAQ: GOOGL)(NASDAQ: GOOG) this week, to make them the fourth company to be valued in 12 figures.
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MyWallSt operates a full disclosure policy. MyWallSt staff currently holds long positions in companies mentioned above. Read our full disclosure policy here.