After making headlines last week in Brussels, the US president continued making news this week after his press conference with Russia’s Vladmir Putin. On Monday, after meeting for two hours with the Russian president, Donald Trump held a press conference where he was asked about Russia’s meddling with the US election. In his response, he appeared to take Putin’s side but later corrected his remarks. This press conference has turned out to be a major issue in the United States, where residents will go for mid-term elections in the next few months.
On Thursday, he made news after criticising the Federal Reserve for increasing interest rates. For years, Trump has believed that the Fed was creating another financial crisis. In the presidential debate, he spoke aggressively about the Fed and what they were doing with interest rates. This criticism was surprising because it was the president who appointed Jerome Powell to replace Janet Powell, the previous Fed chair. Nonetheless, the criticism of the Fed will not change the Fed’s gradual pace of rate hikes. This is because the Fed operates as an independent agency. In fact, the Fed will likely reiterate its independence.
This week, the earning season continued with mixed results. On Monday, the biggest news came from Netflix which reported slower user growth causing its stock to fall by more than 15%. On Wednesday, IBM reported positive results which led its stock to gain. On Tuesday, Goldman Sachs announced that its earnings had grown by more than 40%. It also made it official that David Solomon will replace Lloyd Blankfein as the next CEO. Blackrock – one of the largest asset managers – announced better-than-expected results and announced that it would start considering cryptocurrencies. This pushed the major cryptocurrencies high by double digits.
As the trade conflict continued, the price of commodities continued to decline. Agricultural commodities like soybeans, corn, and wheat dropped to the lowest levels in year. The same was the trend in the metals like copper, gold, silver, palladium, and platinum. These metals have been affected by the trade conflict as traders believe that it will affect the growth.
The Fed chair was also the focus this week. On Tuesday and Wednesday, the Fed chair testified before congress on the economic growth this year and the way forward. In the statement, he reiterated his previous commitment to continue the gradual tightening. In this half of the year, the Fed is expected to do two more hikes – one in September and the other in December.
Another big news this week came from the European Union, which delivered a major blow to Google. The competition commissioner of the region slapped Google with a $5 billion fine. The fine was because of Google’s Android operating system. Google requires manufacturers carrying the OS to preinstall its applications like search and browser. The commission argued that this was illegal because it was locking out its developers. However, while the fine was large, it will not have a major impact on Google which makes the same amount every 16 days.