› News for February 26.

News for February 26.

Metals: gold prices soared to 10-month high.

Gold prices grew in Europe last Tuesday, reaching a 10-month high. Political uncertainty still weighs on traders sentiment, supporting demand for the safe-haven asset. Gold spot prices jumped by 0.19% reaching the level of 1329.82 dollars per troy ounce. The total growth in gold prices was noticed at the level of 9% in the last three months. The three-month future contract for LME copper declined by 0.1% to 6255 dollars per metric ton, although copper is getting more expensive during the last week with the result of +1.8%. Gold is gaining strength despite the demand for the US dollar across the board. So, the WSJ dollar index, measuring the greenback’s strength versus a basket of 16 major currencies, grew by 0.1% recently. Other precious metals were strengthening on Tuesday as well. The main reason for that growth is related to the fact that precious metals are used in hedging purposes in investment portfolios in order to protect them from additional risk during a period of uncertainty. Silver spot prices jumped by 0.19% to 15.84 dollars per ounce, palladium surged by 1.42% to $1480 per ounce, while platinum rose by 0.77% to $813.33.

Central banks’ forecasts, geopolitical events and economic issues led to the growth in gold prices. Investors still consider more soft monetary policy by the US Federal Reserve, as well as US government debt rising, which could become another supportive factor for the safe-haven asset, according to Carlo Alberto Di Casa, the analysts at ActivTrades. Among political factors supporting gold price, the Brexit deadline approaching is still weighing on investors’ activity as the divorce conditions aren’t still agreed between the United Kingdom and the European Union. US President Donald Trump’s intention to impose new import tariffs for Chinese goods worth $200 billion is also a factor lifting precious metals prices. European macroeconomic data scheduled to release this week could also support the gold bulls as the economic slowdown is getting more obvious in Europe. The safe-haven assets’ attractiveness is rising due to the continued weakness in business activity index, Commerzbank analysts noted.

New Zealand is intended to impose more taxes on Google, Facebook and Amazon.

New Zealand government officials stated on Monday that some law changes are planned in order to impose more taxes on incomes related to international transaction companies such as Google, Facebook and Amazon, Reuters Agency reported. Premier Minister Jacinda Ardern stated that ministers cabinet agreed to provide a law-making initiative to discuss how to reload country’s laws in order to push on international corporations adding their participants in the country’s fate.

According to the government statement, those companies are not aimed at paying the income tax, especially when it comes to such giants as social networks, trade platforms and so on. All of them keep getting a significant part of revenues from New Zealand consumers, avoiding paying taxes. Trans-border services cost is estimated at the level of 1.8 billion US dollars in New Zealand. According to Finance Minister Grant Robertson, an estimated income from those taxes could exceed the range of 30 - 80 New Zealand dollars. Digital Services Taxes are usually calculated with a single base from 2 to 3 per cent of the companies’ gross revenue. Several other countries like Italy, France, Great Britain, Spain, Austria and India already announced the DST implementation.

 Google, Facebook and Amazon

WELT: German cars could become more expensive for American consumers due to the new import tariffs.

Donald Trump wants to impose new import tariffs for European cars, and he has 90 days to do that but the final decision is not so clear, accroding to Welt journalists. US consumers, manufacturers and sellers are gainst that idea as German cars will become more expensive for $5 thousand on average, while local cars will add $1800 in prices due to the fact that some parts are supplied from Europe.

Stefan Swartskopf, Welt corresponend was in Washington, trying to get the latest news about how far Trump can go in his intensions to keep presuring on US trade partners across the globe. Trump aid on the weekend: “I love tariffs”. As a result, he has 90 days in order to make the final decision about cars and parts import tariffs, whether certain countries will be affected and so on. Although, the resistance in the country is huge as cars imported from Germany will get more expensive, adding $5 thousand in the price on average. That’s going to affect not only consumers wishing to purchase an imported car but also those buyers who like local automotive products as new import tariffs would affect US manufacturers in the scope of some parts being imported from Germany, France and Italy. It’s hard to imagine US consumers getting happy from such news.

UK government blamed Facebook in personal data leakage and unfair competition.

Facebook representatives stated in December that documents from Six4Three court case “were provided selectively” in order to enlighten just one side of the story. CNN and other agencies asked California court to make the documents public. The investigation was related to the claim against Facebook in California and it took 18 months. The committee received documents at the end of last year from a small company Six4Three. According to the committee data, Facebook “wanted to change users’ confidential data settings to pass them to software developers”. Law-makers also stated that the social network forced several such companies leaving the market. Facebook management structure remains unclear for those who are apart of the business. That action was made with the target of hiding the knowledge and responsibility for certain decisions.

Facebook answered the blaming by ensuring that the company did not violate laws or competition rules. Facebook privacy policy manager Karim Palant in Great Britain stated that the company acts in accordance with the current laws, being open to reasonable regulation. The social network representative also denied the charges of trading data and unfair competition. The committee’s investigation includes almost twenty oral questions including hearings in Washington. An international committee has been created with representatives from 19 countries. UK Parliament published a report in December, containing 250 pages of internal communications by the Facebook management team. According to the report, the company’s managers used to discuss the possibility of providing personal users’ data to advertisers in 2012.

Why Warren Buffett sold Apple shares and invested in American banks.

The fourth quarter of 2018 was one of the toughest periods for US equities. US billionaire and legendary investor Warren Buffett used that situation to benefit on the market crash, making a decision of investing in American Banks. The rule of buy when the price falls worked perfectly for Berkshire Hattaway’s owner, as shares prices performed a dramatic recovery right after the October’s plunge, adding several billion to wealthy investors who understood the opportunity and jumped in at the right moment. At the same time, Warren Buffett lowered his stake in Apple company.

Berkshire Hattaway became the largest holder of 4 out of 5 American Banks after six months of heavy-volume purchasing of those shares. For instance, the investment fund increased its stake in JP Morgan Chase, Bank of America, PNC Financial Services and U.S. Bancorp. As a result, a perfect investment moment has been found, having in mind the sharp bullish rally of the US equities market recently. Buffet’s decision to get rid of Apple, Oracle and IBM shares was also well foreseen.

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