Simon Mugo

Microsoft Corp. (NASDAQ:MSFT) recently announced that it was updating its Flight Simulator video game for the first time since 2006, much to the surprise of most gaming companies and fans. The updated version of the game is set to hit the markets in 2020 and the tech giant has said that the game will support third-party content despite most developers being in the dark about the revamping process. Most developers were disappointed that Microsoft did not consult them when creating the new version of the game as they would have loved to help the company create unique features that would appeal to current gamers. Some analysts are concerned that the gaming market has changed significantly in the past few years and that Flight Simulator might miss the mark if it maintains its current format where a single flight could last for hours. Industry experts also say that the new game will face stiff competition from other simulators such as Laminar Research’s X-Plane and Lockheed Martin’s Prepar3D. It remains to be seen whether the world’s oldest video game (launched in 1982) will create a new legion of fans.

Eldorado Resorts Inc. (NASDAQ:ERI) and Caesars Entertainment Corp. (NASDAQ:CZR) have agreed to merge in a cash and stock deal that places Caesars values at $17.3bn, inclusive of outstanding debt. The deal was spearheaded by Carl Icahn, a billionaire activist investor who has a seat on Caesar Entertainment’s board after winning a proxy war earlier this year. The deal creates a casino and gaming operator with revenues in excess of $6bn making it a major player in the industry. The merger announced earlier today values an individual share of Caesars Entertainment at $12.75, which is a major premium, given that the company’s shares closed at $9.9 during Friday’s session. Despite emerging out of bankruptcy protection in 2017, Caesars operates more properties than Eldorado Resorts, but Icahn believes that merging the two companies is the best course of action for the foreseeable future. Analysts and investors are yet to start analysing the deal given that it was just announced, but Icahn has a solid track record of making savvy investment decisions and unlocking the hidden value in the target companies.

North Korean leader Kim Jong-un appears hopeful that the recent visit by Chinese President Xi Jinping will lead to a lifting of international sanctions on the country and a flood of foreign investors into the country, but this may not be the case. According to the Korea Society, North Korea has to overhaul its current governance system by implementing structural reforms that will protect investors and loosen the government’s grip on most sectors of the country’s economy. Kim Jong-un is currently stuck on the first step, which is abandoning his nuclear ambitions and surrendering the country’s nuclear arsenal in order for the US and other major countries to lift their sanctions on North Korea. However, this is just the first step as analysts believe that investors would still avoid the country because of rampant corruption since it is ranked as one of the most corrupt countries in the world by Transparency International. It is not yet clear whether Kim Jong-un is willing to implement such wide-ranging reforms in order to attract foreign investors to his country if sanctions are lifted.

General Electric Co. (NYSE:GE) yesterday rallied 2.8% to close at a four-month high of $10.63 after disclosing that its aviation division closed orders worth $55bn at the Paris Air Show. However, investors are wondering whether the stock has room for a bigger rally. To answer this question, we turn to technical analysis methods, which are quite accurate at predicting the future direction of a stock’s price and are used by most analysts for this purpose. According to analyst reports, shares broke and closed above $10.50, which is considered a critical resistance level. The stock’s breakout is also in line with the Dow Theory, which is a fundamental component of technical analysis, as yesterday’s rally completed a bullish breakout pattern demonstrated by a pattern of higher highs and lower lows. The stock’s price chart also completed a bullish cross where the 50-day moving average crossed over the 200-day moving average, which could indicate the start of a bullish trend. Despite all technical indicators pointing at higher prices for GE shares, nothing is guaranteed in the markets and you should always do your own due diligence before making any investment decision.

Many US tech companies are opposed to the imposition of additional tariffs on $300bn of Chinese exports by the Trump administration as this would result in higher prices for tech products such as laptops and smartphones for US consumers. The firms argue that the Chinese companies targeted by the new tariffs are likely to be minimally affected given that they already have a presence in the US where they make some of their products, hence, they will be exempt from the new tariffs. Apple Inc. (NASDAQ:AAPL) wrote a letter to the Trump administration asking the government not to implement the additional tariffs as they would raise the prices of all its products affecting the competitiveness of its products against Chinese tech companies such as Huawei. The tariffs have not only affected individual companies but have also weighed on the world's economy leading to a global economic slowdown as major economies implement protectionist policies to counter aggressive US tariffs. Having been asked for their views on the planned tariffs, US businesses are waiting to see what the Trump administration will do.

There are two main reasons why Philip Hammond, the UK’s Chancellor of the Exchequer, is opposed to a hard Brexit and this is because he believes that a no-deal Brexit would drain the £26.6bn cash hoard that her Majesty’s Treasury has set aside to cushion the country after Brexit. Hammond also believes that the United Kingdom would break up given that Scotland voted to remain in the European Union but would be forced to leave under very bad terms in case of a hard Brexit. However, Boris Johnson, the leading candidate in the Conservative Party leadership contest, has promised to leave the EU on 31st October regardless of whether there is a deal between the EU and the UK. Given that Johnson is likely to become the next Prime Minister of the UK, it is quite likely that the country will consider a no-deal Brexit as a viable option and it remains to be seen whether Parliament will approve such a plan.

Following the $40m donation by American billionaire, Robert F. Smith to Morehouse College's 2019 graduating class, Hong Kong billionaire Li Ka-Shing recently donated an annual gift of $14.4m for the next 4-5 years to cover the tuition fees for incoming Chinese undergraduates. It is quite likely that more wealthy individuals are going to follow this trend and donate sums to cover tuition fees and pay student loans for college students in their chosen institutions as a way of giving back to the society. While these are laudable gestures by prominent people in society, many are asking whether this is the right solution for the massive student loan problem that most countries are dealing with as the cost of higher education has skyrocketed in recent years. There are many alternative solutions that have been suggested by education experts as well as finance professionals to deal with the problem, but the reality is that the entire higher education system needs to be revamped and the tuition costs reviewed. Most experts agree that very few governments are committed to a complete overhaul of the higher-education system, especially in relation to student loans, which means that we will have to make do with the donations for now.

Mexico became the first North American country to ratify the United States-Mexico-Canada Agreement (USMCA), which was signed last year to replace the ageing North American Free Trade Agreement (NAFTA) at President Trump’s insistence. Many experts said that the USMCA deal was not that different from the outgoing NAFTA apart from some minor changes to key clauses in the old deal and the inclusion of a few new clauses. Some analysts have opined that Mexico could have rushed to approve the USMCA deal in order to stop President Trump from imposing additional tariffs on the country given that the US accounts for 80% of Mexican exports. Trump will definitely be pleased with Mexico’s ratification of the USMCA deal, but this does not mean that he will stop pressuring the country to stop its citizens from illegally crossing the border into the US, which is why he had threatened to impose further tariffs on Mexico. Most experts have questioned the rationale of Trump’s argument given that US border agencies have more resources than their Mexican neighbours, but they have failed to stop illegal migration. It is not clear what Mexican authorities can do to curb this trend.

Well, just as there is no perfect stock for every investor, there is also no perfect cryptocurrency for all investors. However, there are some that are regarded as being much better than bitcoin in various aspects. For example, Litecoin has performed over two times better than bitcoin this year given that it's up 340%, while bitcoin has rallied by a mere 140%. Therefore in terms of appreciation, Litecoin was a much better investment than bitcoin this year. However, many crypto investors buy altcoins (cryptos that are not bitcoin) based on factors such as their usability and scalability given some of the limitations associated with bitcoin. Investors who use these parameters when choosing crypto investments have been known to prefer ethereum (ETH) and ripple (XRP) due to their wide applications and scalability. Other crypto investors prefer to invest in crypto tokens that have a specific use such as monero (XMR) and cardano (ADA) among others. There are thousands of blockchain projects that long-term investors can back, but their analysis is beyond the scope of this answer. Always remember to do your own due diligence before buying any digital assets and be warned that cryptocurrencies are highly volatile in nature.

The State of New York reached a landmark deal on a climate law similar to the Green New Deal with the main target of making the state carbon neutral by 2050. This is an ambitious goal that will see the Empire State generate 100% of its electricity without the use of carbon-based fuels by 2040. The bill is set to become law on 19th June and is likely to draw the ire of President Trump’s administration given the government’s efforts to reverse environmental laws including pulling the US out of the Paris accord. The new law makes New York the sixth state to adopt a 100% clean energy target after California, Hawaii, Nevada, New Mexico, and Washington and is likely to inspire other states to adopt similar measures. However, New York’s bill is the most ambitious and aggressive climate bill passed by any of them given that it covers every aspect of the state’s economy. Most analysts believe that the remaining states will quickly follow suit and this will put immense pressure on the Trump administration to prioritise policies related to climate change and global warming by reinstating the laws enacted by previous administrations.

The fact that Banco Santander SA (BME:SAN) lost its appeal against the ruling in favor of Mercado Bitcoin, a Brazilian crypto exchange, says a lot about the overall acceptance of digital assets by authorities in certain countries. Most crypto investors and entrepreneurs are hoping that other banks will take note of the ruling and be more accommodative of crypto exchanges and other firms dealing with digital assets that still need traditional banking services. However, I believe the road ahead is still full of challenges given that many countries do not have comprehensive laws that regulate digital assets, which leaves crypto companies at the mercy of banks and other institutions. The only way to prevent similar account closures by banks is for global and national authorities to draft laws that stipulate the role of digital assets and exchanges that facilitate crypto transactions in the global financial system. This is yet to happen, but there is slow progress in the right direction given that G20 leaders recently asked global regulators to create a comprehensive framework for the regulation of blockchain assets and exchanges.

Alibaba Group Holdings Ltd. (NYSE:BABA) announced unexpected changes to its management team today with the appointment of Maggie Wu, the company’s CFO, as head of strategic investments replacing Joe Tsai, the executive vice-chairman. The Chinese e-commerce giant also announced that it had merged DingTalk, its enterprise software division with its cloud division and that Freshippo, its supermarkets unit, would become an independent business. Many analysts believe that the business restructuring and management reshuffle was driven by the fact that Alibaba’s e-commerce business appears to have peaked, which means that the company has to generate revenue growth from other business units. The appointment of Maggie Wu as head of strategic investments appears to be a move aimed at streamlining the company’s investments given that Wu is also the Group’s CFO as the company attempts to integrate its investments into its main operations. Alibaba’s CEO, Daniel Zhang said that the move was meant to guarantee innovation and secure the company’s future. Zhang is set to take over as chairman once Jack Ma retires on 10th September.

Huawei recorded a 40% drop in international sales during the month of May following the US blacklisting of the Chinese tech firm, which led other companies such as Google to cut their ties with them. This trend is likely to continue as the US piles pressure on its allies to shun Huawei’s 5G network equipment in favour of US or European equipment amid spying accusations levied against the Chinese tech giant by the Trump administration. Huawei’s CEO, Ren Zhengfei today announced that the company will slash production by up to $30 billion over the next two years, and lowered the company’s annual revenue forecast for 2019 and 2020 to $100 billion from the $125 billion target set earlier this year. However, Zhengfei said that the Chinese telecom major would recover fully from the sanctions by 2021 as it will not cut its research and development budget. He also added that while international sales had dropped significantly, Chinese sales were still robust. The Chinese company has refuted claims that it would cancel the international launch of its new Honor 20 smartphone scheduled for 21st June while suggesting that it could build a smartphone without US parts.

It is not yet clear exactly what President Trump intends to achieve with his tariffs against America’s trade partners, especially its allies such as the European Union, Canada, and India among many others, but so far neither the US nor its partners have benefitted from the tariffs. Most economists, analysts, and investors did not expect Trump to take his trade war seriously mainly because it goes against the basic principles of economics, investing and finance, which is why most countries are members of the World Trade Organization. History has numerous examples of countries that pursued protectionist policies such as China and the former Soviet Union, which isolated their economies from the rest of the world and ended up falling behind their peers. A present-day example of a protectionist economy that has been left behind is North Korea, which is why no sane leader would pursue a protectionist and isolationist trade policy because such adventures typically lead to economic disasters. However, the US is a very important part of the global economy. This magnifies the impact of any American economic disaster, as it would affect the rest of the world and could trigger a global recession.

It is highly unlikely that Warren Buffett will suddenly become a crypto enthusiast following his $4.75 million lunch date with Tron Founder Justin Sun, but most people are hoping that he will acknowledge cryptos in one way or another. However, from a marketing standpoint, the lunch has provided a major boost for cryptos given Buffett’s characterisation of the currencies as ‘rat poison squared’ among other choice phrases in the past, which has made many institutional investors cautious towards cryptos. Most crypto enthusiasts are hoping that he will, at the very least, admit that there could be some value in digital assets given his past aversion to tech stocks and his current investments in tech companies including Apple and Amazon. Any sort of approval from Buffett following the lunch with Mr. Sun is likely to make other institutional investors more accommodative of cryptocurrencies and maybe even lead to significant investments from institutional players. Regardless of the outcome, Buffett is not likely to invest in cryptos given that he has over $100bn in funds ready for investment, which makes smaller investments quite unappealing to Berkshire Hathaway.

The US Federal Trade Commission filed an application opposing QUALCOMM Inc.’s (NASDAQ:QCOM) attempt to have the recent antitrust ruling by US Federal Judge Lucy Koh suspended as it files an appeal against the ruling. The FTC has asked Judge Koh not to grant Qualcomm’s request given that an appeal could be held up in court for several years, while Qualcomm’s customers and partners would continue to suffer under its current practices. LG Electronics also filed a similar application saying that it is in negotiations with Qualcomm and that the chipmaker is exploiting LG given that the Korean manufacturer depends on Qualcomm’s chips to make its smartphones. LG’s case is compelling, given that the antitrust ruling would have slashed Qualcomm’s royalty payments for each chip from several dollars to cents. This would have been a big blow to the chipmaker given that it generates most of its revenues from patent licensing. The Korean manufacturer further added that it was currently in negotiations with Qualcomm for a supply contract as well as a licensing agreement, and would be forced to sign an unfair deal.

Deutsche Bank AG (ETR:DBK) has tightened its “know your customer” (KYC) processes in an attempt to prevent unscrupulous customers and employees from conducting illegal transactions through the bank. The German lender has sent out letters to thousands of its investment banking clients across the globe requesting them to provide detailed descriptions of their businesses and to supply them with legal documents to support their claims. The bank has requested its customers to provide information on the ownership structures of their companies, which will help the lender weed out shell companies that have no physical operations but are being used by individuals to launder money through the global financial system. The move comes as the German lender is trying to get back into the good graces of global regulators following multiple controversies that have tarnished the bank’s reputation, such as the $20 billion Russian money-laundering scandal. Deutsche Bank is also in the process of restructuring its investment banking business, which has struggled with falling revenues in the recent past, as it searches for new revenue streams for the division.

AT&T Inc. (NYSE: T) has made a lot of changes to Time Warner since its $100 billion acquisition was approved last year leading to the appointment of John Stankey of the media behemoth. Some of the major changes that have occurred since Stankey took over as Time Warner CEO is the renaming of the company as WarnerMedia amid a major shift in the media company’s strategic direction, which led to the departure of three top executives. The CEO departures and Stankey’s leadership style has many people raising questions about AT&T’s overall strategy with WarnerMedia, but Stankey explains that he is pushing for a major cultural shift at the media conglomerate. According to Stankey, AT&T paid a premium to acquire Time Warner in order to make radical changes to the company’s operations and find ways to recoup its massive investment. Stankey is behind the development of a new streaming service that will incorporate content from HBO’s current streaming service, Warner Bros. Productions and Turner Broadcasting. He wants to attract at least 70 million subscribers to the new service.

Most people did not expect Fiat Chrysler Automobiles (NYSE: FCAU) to revive the merger proposal that it quickly shelved on June 6 after the French government postponed a Renault SA (EPA: RNO) board meeting set to discuss the merger proposal. However, a recent exclusive report published by Reuters claims that the two automakers may actually revive their merger plan if Renault’s alliance partner Nissan Motor Co Ltd agrees to the deal. Sources familiar with the matter told Reuters that Nissan could approve the deal if Renault ceded part of its 43.4% shareholding in Nissan given the frosty relations between the two alliance partners. The sources also claimed that Fiat Chrysler CEO John Elkann and Jean-Dominique Senard his Renault counterpart have since reignited talks about the potential merger and that both of them are optimistic that a new merger proposal could be approved. Although the two companies declined to comment on the rumours, most analysts believe that a merger between the two auto manufacturers is inevitable.

Benfica, a major European football club based in Lisbon, Portugal today announced a partnership that would allow its fans to purchase tickets and merchandise using cryptocurrencies. This was billed as a major milestone for the blockchain industry given the size of Benfica’s fan base and reputation, which has opened the door for other major football clubs to do the same. Most crypto experts agree that such big announcements are good for the public perception of crypto and other digital assets, which lays the groundwork for their mainstream adoption. Such experts remember how in the past the word crypto was associated with the dark web and other illegal activities and how that perception is slowly changing. However, some crypto experts faulted Benfica’s decision to use a payment processor as opposed to accepting the crypto payments directly, which displays a lack of confidence in cryptocurrencies. Overall, the move by Benfica is a huge step for crypto payments in the sports industry and is likely to trigger similar actions by other major sports teams from different disciplines.

Paul Hudson is the outgoing chief executive in charge of Norvatis’ pharmaceuticals division and Sanofi SA (EPA:SNA) chose him to succeed Olivier Brandicourt as CEO largely due to his reputation and experience. Sanofi’s board chairman, Serge Weinberg said: "We are very pleased that Paul Hudson has agreed to join Sanofi. His skills and experience give him all the assets he needs to accelerate growth and lead the group's adaptation to new strategic challenges, particularly in the areas of research and development and digital." Hudson is widely known as an experienced and efficient manger and his digital expertise within the pharmaceuticals industry was a major reason for his appointment. Most analysts agree that Hudson’s appointment will be a hit with the drug maker’s shareholders and is likely to trigger a rally by Sanofi shares. Prior to joining Norvatis, Hudson worked at Celgene and AstraZeneca, where he left an impressive legacy. Hudson is the second top Norvatis executive to be poached by rivals who are keen to hire the talented individuals behind products such as the $2.1 million-per-patient single dose gene therapy Zolgensma, which was recently approved to treat children suffering from spinal muscular atrophy.

The U.K.’s Financial Conduct Authority (FCA) today announced new policies aimed at streamlining the British bank overdraft business segment, which it referred to as being “dysfunctional”. The FCA said that all U.K. banks and building societies would have to charge a fixed rate for both arranged and unarranged bank overdrafts regardless of the duration of the overdraft facility. This is a major blow to U.K. banks given that they generated about £2.4 billion ($3.1 billion) in revenues from overdrafts in 2017, which is likely to decline substantially given that a third of this amount was generated from unarranged overdrafts. The new policies, which come into effect in April 2020 require banks to charge a single annual interest rate on all types of overdrafts, while eliminating the current practice of fixed monthly or weekly charges. The FCA also went further to state that payments for refused transactions such as bounced checks should not exceed the actual costs incurred by the bank. This is part of a series of policies implemented by the FCA in order to protect vulnerable consumers including the cap on interest rates charged by payday lenders.

Sir Philip Green faces the monumental challenge of trying to save his cherished Arcadia Group from bankruptcy as his retail stores and brands hang on the brink of insolvency. The retail tycoon won the support of the Pension Protection Fund (PPF) today, which is the company’s largest creditor. Although Sir Philip and Lady Christina Green have the PPF’s support for their £385 million restructuring plan, they still need the help of the rest of the creditors in order to execute their plan. The other creditors are mostly landlords who rent out the remaining stores operated by the Arcadia Group who will have to lower their rents in the new deal. The rest of the creditors are set to vote on the deal later today, but one landlord, Intu Properties, which owns two of Arcadia’s prime locations is opposed to the restructuring agreement. Intu owns Lakeside in Essex and Manchester's Trafford Centre. This could thwart Sir Philip’s rescue plan and could see his retail empire quickly sink into insolvency after today’s vote.

Well, I believe that Costco Wholesale Corp.’s (NASDAQ: COST) planned store in Shanghai, China will be a big hit with Chinese consumers for several reasons. Firstly, while most Americans know Costco as a discount wholesale retailer, many foreigners view it as a premium brand. Costco is not the only American brand that is highly regarded in other parts of the world as the same applies to Starbucks and McDonalds stores in most Asian and other developing countries. These are countries with a growing middle-class population that wants to distinguish itself from the rest of the population by buying American brands including shopping at Costco. Many Chinese consumers would love to shop at American stores such as Costco, but this is almost impossible given that the wholesale retailer has no presence in China. This is about to change as Costco plans to open a branch in Shanghai. The store is likely to be swamped with customers who want to have the American shopping experience, especially during the first few weeks after it opens.