The Race (back) to Space

Feb 22, 2019   //   by Bruce Mason   //   Weekly Market Update  //  No Comments

This week was one of the most boring I can remember.  Usually I can find something to write about between economic data, political, and corporate news.  I can’t remember the last time I looked down at my notes this late in the week and a rather blank page stared back at me.  Perhaps this will be the week I finally shorten this email to Marc’s satisfaction.

Perhaps the biggest cause for optimism is that President Trump signaled flexibility in a key deadline for trade talks with China.  According to the President, trade talks are going well and the current March 1 deadline isn’t a “magical” date, suggesting additional tariffs on billions of dollars of Chinese imports may be delayed.  There is no question the market is anticipating a positive development out of trade negotiations, however, more concrete details are likely needed to push stocks much higher.

You can tell I’m really stretching when I’m left to discuss topics such as “Space Force”.  President Trump signed a directive ordering the Pentagon to draft legislation creating a Space Force as the sixth U.S. military branch.  If approved by Congress, it would mark the first new military division in 72 years.  A renaissance of research and innovation in aerospace technology could be the stimulus for the next technological revolution.  Looking at how the Internet has changed our everyday lives, it is perhaps not much of a reach to think that this next technological leap could have an even bigger impact.  We are talking space travel after all.

Along those lines, you may be surprised to learn that after the U.S. ended its space shuttle program in 2011, it relies on Russia to transport its astronauts to and from the International Space Station (ISS).  Fortunately, NASA has been working hard to regain supremacy in a collaboration with SpaceX and Boeing.  While the mission may have changed, see mission to Mars, the importance of manned space travel is critical to its success.  The catch is that the contract between the U.S. and Russia will expire this summer.  Delays in both SpaceX and Boeing’s programs could leave U.S. astronauts unable to access the ISS and thereby cede control.  The clock is ticking.

In company news, Payless ShoeSource (yes, that is its full name) is filing for Chapter 11 bankruptcy again, Volkswagen is wringing its hands over the potential for huge auto tariffs, and Apple begins offering interest-free iPhone loans in China.  Oh, and Kraft Heinz took a $15 billion write-down which caused its stock price to fall 28% today.  Lest it not be forgotten, Nike also had a bit of a misstep this week when perhaps the best college basketball player today, Zion Williamson, blew out his Nike shoe, injuring his knee in the first few minutes of the Duke-North Carolina game which was broadcast on national television.  Talk about a PR nightmare.

In closing, let’s take a minute to talk about the Olympics.  In recent years, the Olympic Committee has decided to bring back some old sports and add some new ones.  At the moment there are 28 sports officially recognized by the Olympics.  Among those under consideration for the 2020 Olympic games in Tokyo is karate, baseball/softball, squash, and petanque (a game like lawn bowling or bocce).  However, the next one is what caught my eye.  It seems the committee is considering breakdancing for the 2024 Paris games to appeal to younger fans.  Yes, breakdancing is being proposed as an Olympic sport.  You read it here first.  Now you know.

February 22, 2019

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