Elon Musk, chief executive officer of Space Exploration Technologies Corp. (SpaceX) and Tesla Inc., speaks during an event at the SpaceX launch facility in Cameron County, Texas, U.S., on Saturday, Sept. 28, 2019.
Bronte Wittpenn | Bloomberg | Getty Images
ORLANDO, Fla. — Tesla and SpaceX CEO Elon Musk predicted Friday that the Chinese economy will eventually surpass the United States’ by at least two-fold – which would up the ante between the nations’ massive militaries.
“A thing that will feel pretty strange is that the Chinese economy is probably going to be at least twice as big as the United States’ economy, maybe three times,” Musk said during a fireside chat with U.S. Air Force Lt. Gen. John Thompson at the Air Warfare Symposium in Orlando, Florida.
“The foundation of war is economics,” Musk said. “If you have half the resources of the counterparty then you better be real innovative, if you’re not innovative, you’re going to lose.”
The two nations already are the world’s two largest economies. The U.S. dominates with $21.44 trillion in nominal GDP and makes up one-fourth of the world economy. China, however, is the fastest-growing trillion-dollar economy with GDP of $14.14 trillion, according to the Nasdaq.
Because China’s population is about four times larger than the United States, Musk said it would lower the barrier for China to surpass in economic size. The United States has roughly 330 million people, according to the U.S. Census, while China has more than 1.3 billion people.
“It would only require getting to a GDP per capita half the size the United States for their economy to be twice the size of ours,” Musk said.
China overtaking the American economy would likely cause increased tension between the two countries, which are already at odds on issues such as trade and 5G technology.
Throughout his conversation with Thompson, Musk repeatedly stressed the importance of innovation in the United States in order to maintain its competitive edge. When it comes to space, Musk said that the U.S. is at risk of falling behind.
“This is not something that was a risk in times past but is a risk now,” he said. “I have zero doubt that if the United States doesn’t seek innovation in space it will be second in space.” CNBC reported last week that SpaceX is seeking to raise about $250 million at a $36 billion valuation.
In order to encourage innovation, Musk called for more industry competition and specifically called out the Pentagon’s most expensive weapons system.
“The Joint Strike Fighter, there should be a competitor … that’s a controversial subject but I don’t think it’s good to have one provider,” he said, referring to Lockheed Martin’s F-35 program.
Posthaste: Here are three promising data points that show the Canadian economy is ready to rebound – Financial Post
Rays (plural) of good news are piercing through the gloom surrounding the Canadian economy.
And not surprisingly, the country’s resilient housing sector is among the first to report a rebound.
Home sales jumped 53.2 per cent in May month-over-month, suggesting that April’s dramatic plunge in sales may have been the market’s low point.
Another crucial statistic was new listings that rose 47.5 per cent during May, compared to April, according to the Toronto Regional Real Estate Board.
The Real Estate Board of Greater Vancouver had also reported on Tuesday that homes sales jumped an unadjusted 34 per cent in May from April, while prices remained flat month-on-month. Benchmark prices rose 2.9 per cent to $1.03 million from a year ago.
Of course, these averages look good as the economy was wallowing in complete uncertainty in April, decimating homes sales and upending market trends.
While home sales in Toronto remain 53.7 per cent lower than May 2019, the decline was less than the 67.1 per cent year-over-year decline reported for April 2020.
“The MLS Home Price Index Composite Benchmark price was virtually unchanged in May 2020 compared to April 2020,” TRREB noted. “On a year-over-year basis, the composite benchmark was up by 9.4 per cent. The average selling price for all home types combined was up by three per cent compared to May 2019 to $863,599. On a seasonally adjusted basis, the average selling price was up by 4.6 per cent month-over-month compared to April 2020.”
A May poll by TRREB showed 27 per cent of the Greater Toronto Area households were looking to purchase a home over the next year, suggesting that sales may improve further in the coming months provided the economy is not adversely hit by new waves of the pandemic.
“As we move toward recovery, the housing sector will be a key driver of growth as consumer confidence increases and more households look to take advantage of very low borrowing costs,” said TRREB CEO John DiMichele.
Investors will also be watching a key metric that indicate where prices are headed next, especially in the pricey Vancouver real estate market.
Sales-to-active listings ratio for May 2020 was 15 per cent in the Vancouver region, detached homes at 13.5 per cent, 18.9 per cent for townhomes, and 14.8 per cent for apartments.
“Generally, analysts say downward pressure on home prices occurs when the ratio dips below 12 per cent for a sustained period, while home prices often experience upward pressure when it surpasses 20 per cent over several months,” noted the Real Estate Board of Greater Vancouver.
TRREB is expecting prices to remain stable over time, with some possible uptick.
“With home sales and new listings continuing to trend in unison in May, market conditions remained balanced. This balance was evidenced by year-over-year average price growth slightly above the Bank of Canada’s long-term target for inflation,” said Jason Mercer, TRREB’s chief market analyst. “If current market conditions are sustained during the gradual re-opening of the GTA economy, a moderate pace of year-over-year price growth could continue as we move through the spring and summer months.”
Another glimmer of hope that the economy is returning to some form of normalcy has come from the transportation sector.
The Canadian National Railway Co. said it saw a 4 per cent increase in volumes of good shipped in May compared to April.
While the recovery is expected to be slow, it’s a positive sign after shipments hit bottom last month, the company’s chief financial officer Ghislain Houle said Tuesday at the UBS Global Industrials & Transportation virtual conference, according to Bloomberg.
“I think we’re seeing the light at the end of the tunnel,” Houle said. “Hopefully, it will hold.”
Canadian Pacific Railway Ltd. also said it set a new record for shipping Canadian grain and grain products in May, moving 2.80 million metric tonnes in the month.
Finally, yet another sign consumers are ready to put COVID-19 behind them is the 113,224 new light vehicles sold in Canada in May, a 147 per cent jump over April’s sales, according to a report by DesRosiers Automotive Consultants Inc. Still, May 2020 car sales were down considerably compared to the same period last year.
“It’s a measure of the strange times in which we find ourselves in that a market decline of only 44 per cent can seem like a positive sign. However, following the estimated 74.6 per cent decline in April — which sent Canadian new light vehicle sales levels back in time to roughly the early 1950’s — May’s year over year decline can evoke a touch of cautious optimism as the first tentative shoots of recovery spring up from a badly damaged marketplace,” the consultants said in a statement.
“Of course, the ongoing situation remains in flux and an already trying year could prove to have a few tricks left up its sleeves yet,” the consultants warned.
They are wispy green shoots of recovery — but we will take it.
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PROTESTS GO GLOBAL: Protesters hold placards next to the statue of 19th century British Prime Minister Benjamin Disraeli outside St George’s Hall in Liverpool, northwest England, on June 2, 2020, during demonstration after George Floyd, an unarmed black man who died after a police officer knelt on his neck during an arrest in Minneapolis, USA. – The city of Liverpool lit up their civic buildings in memory of George Floyd on June 2 the death of whom in Minneapolis while in police custody has sparked days of unrest in the US city and beyond. Paul Ellis/AFP via Getty Images
- Bank of Canada to make an interest rate announcement at 10 a.m. ET
- Teck Resources Ltd. hosts a conference call to discuss its 2019 Sustainability Report and strategy
- Quebec’s Treasury Board President Christian Dube and Finance Minister Eric Girard to discuss a bill to mitigate the effects of the pandemic and quickly revive the Quebec economy
- A Papua New Guinea court is set to rule on whether Barrick Gold Corp. can proceed with a legal challenge over the government’s refusal to extend its lease on the Porgera gold mine
- Case management conference for Huawei CFO Meng Wanzhou in Vancouver
- Transport Minister Marc Garneau, CEO of Vancouver Fraser Port Authority Robin Silvester, Robyn McVicker, a vice-president at YVR and Tim Strauss, vice-president of Air Canada cargo take part in Transportation Forum 2020
- Notable Earnings: Stingray Group Inc., Canada Goose Holdings Inc., AutoCanada Inc.
Some of the biggest cannabis players when legalization took effect 20 months ago have successfully held on to their dominant positions, despite a year of bankruptcies, downsizings, revoked licences, executive firings, mass layoffs and a long market selloff, writes Vanmala Subramaniam.
It is hard enough to make money in the stock market, even without the world shut down due to a global pandemic. In fact, studies have proven that the average stock actually goes down. So how does one make money? Well, it’s all in the math. A stock can “only” decline by 100 per cent. But if you have a big winner, you can make 1,000 per cent returns, or more. A winner or two can more than make up for many losers, writes Peter Hodson.
Today’s Posthaste was written by Yadullah Hussain (@Yad_Fpenergy), with files from The Canadian Press, Thomson Reuters and Bloomberg.
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Why the disconnect between stocks and the economy is worrying – CNN
IPOs are back as the stock market soars
The number of black leaders at US companies is still dismal
- Black professionals in 2018 held just 3.3% of all executive or senior leadership roles, which are defined as within two reporting levels of the CEO, according to the US Equal Employment Opportunity Commission.
- Among Fortune 500 companies, less than 1% of CEOs are black. Today there are only four, down from a high of six in 2012, according to Fortune.
- Black Enterprise’s 2019 Power in the Boardroom report found that among S&P 500 companies, there were 322 black corporate directors at 307 companies. Of those, 21 were chairmen and lead directors. But the report also found that more than a third of S&P 500 companies did not have any black board members whatsoever.
- The ADP report on US private employment arrives at 8:15 a.m. ET.
- The ISM Non-Manufacturing Index for May, a closely-watched gauge of the US services sector, follows at 10 a.m. ET.
Swiss Economy Slumps the Most in Decades – BNNBloomberg.ca
(Bloomberg) — The Swiss economy slumped the most in at least four decades as a result of the coronavirus pandemic, with private consumption and investment plummeting.
First-quarter gross domestic product plunged 2.6%, data from the State Secretariat for Economic Affairs on Wednesday showed. That compares with a 2.1% hit in a Bloomberg survey of economists and is the biggest three-month contraction since the start of the time series in 1980.
Like neighboring France and Germany, Switzerland responded to the pandemic by winding down much of public life. Business closures across the continent have also crimped trade in goods and investment.
While government subsidies have kept a lid on unemployment and helped companies avoid a cash crunch, the SECO expects the economy to shrink 6.7% this year before staging a slow recovery in 2021.
Machine industry group Swissmem said that 80% of its member companies were forced to apply for short-time work, and that the full impact of the pandemic wouldn’t be felt by the sector until the second or third quarter of this year.
To prevent the rallying haven franc from hurting the economy still further, the Swiss National Bank has stepped up the pace of its currency interventions. Its deposit rate is already at a record low of -0.75%.
©2020 Bloomberg L.P.
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