People worldwide are going to begin voting with their wallet more not just in the U.S. but also worldwide after the Panama Papers revelations and more details get out worldwide.
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Overheard: Voting With Their Wallet
Overheard: Voting With Their Wallet
Political prognosticators of all stripes made the mistake many months ago of not taking Donald Trump’s presidential ambitions all that seriously. Investors didn’t want to make the same mistake on Tuesday.
One of the presidential candidate’s initiatives is the construction of a wall on the border between the U.S. and Mexico designed to keep citizens of that country out. Perhaps the most audacious part of the plan is that Mr. Trump insists that the Mexicans are the ones who would end up paying for it.
Pressed on just why they would do such a thing, his campaign released a memo that became public on Tuesday outlining some unusual use of terrorism financing rules. The memo said that when Mr. Trump becomes president, he would make it “an easy decision for Mexico.” Either pay many billions of dollars for the construction of the wall designed to keep their citizens out of the U.S. or face a cutoff of money transfers used for remittances by Mexicans working north of the border.
Western Union and MoneyGram International —two companies that do a roaring and profitable business in facilitating such transfers—dropped by 1.3% and 2.1% in early trading, respectively. Perhaps a sign that investors are growing more sensitive to candidates’ pronouncements as the election draws closer. By late afternoon Tuesday, though, both stocks were up in a down market—maybe a sign of how seriously investors take Mr. Trump once they have had some time to reflect.
Sanford C. Bernstein’s Michael Parker analyzed the 1,123 China-domiciled companies listed in Hong Kong, Shanghai or New York that have so far reported 2015 results. Though their profits are nothing to write home about, Mr. Parker notes that total capital spending at these firms fell 10%, the energy industry leading the way. Total debt, not counting financial firms, dropped 4%.
For an individual firm experiencing a drop in demand, cutting spending and paying down debt makes sense. This commercial logic extended to 123 state-run firms on this list, too, who pared back capital spending by 11% and debt by 13%.
Yet prudence on the part of listed companies may not mean much for the economy. The stock of China’s broad measure of credit, for instance, rose last year, meaning China overall still borrowed more. Expect the investors exposed to the decisions made by, say, unlisted Chinese steelmakers or oil refiners to keep groaning.
One of the presidential candidate’s initiatives is the construction of a wall on the border between the U.S. and Mexico designed to keep citizens of that country out. Perhaps the most audacious part of the plan is that Mr. Trump insists that the Mexicans are the ones who would end up paying for it.
Pressed on just why they would do such a thing, his campaign released a memo that became public on Tuesday outlining some unusual use of terrorism financing rules. The memo said that when Mr. Trump becomes president, he would make it “an easy decision for Mexico.” Either pay many billions of dollars for the construction of the wall designed to keep their citizens out of the U.S. or face a cutoff of money transfers used for remittances by Mexicans working north of the border.
Western Union and MoneyGram International —two companies that do a roaring and profitable business in facilitating such transfers—dropped by 1.3% and 2.1% in early trading, respectively. Perhaps a sign that investors are growing more sensitive to candidates’ pronouncements as the election draws closer. By late afternoon Tuesday, though, both stocks were up in a down market—maybe a sign of how seriously investors take Mr. Trump once they have had some time to reflect.
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China may be groaning under overcapacity and indebtedness that will take years of reforms to repair. But at least the average publicly traded Chinese company appears to be doing something to correct the problem—for itself.Sanford C. Bernstein’s Michael Parker analyzed the 1,123 China-domiciled companies listed in Hong Kong, Shanghai or New York that have so far reported 2015 results. Though their profits are nothing to write home about, Mr. Parker notes that total capital spending at these firms fell 10%, the energy industry leading the way. Total debt, not counting financial firms, dropped 4%.
For an individual firm experiencing a drop in demand, cutting spending and paying down debt makes sense. This commercial logic extended to 123 state-run firms on this list, too, who pared back capital spending by 11% and debt by 13%.
Yet prudence on the part of listed companies may not mean much for the economy. The stock of China’s broad measure of credit, for instance, rose last year, meaning China overall still borrowed more. Expect the investors exposed to the decisions made by, say, unlisted Chinese steelmakers or oil refiners to keep groaning.
