Church is a great investor; Bitcoin is up 125% this year; US oil companies strike alliances with Saudis


Profitable Moment
 

To prepare for China, act now, before it’s too late

I am in Shanghai, and once again, I stand in awe of the growth and rising power of this country. But it’s more than just the population size, GDP data and mind boggling trade surpluses.
 
I think about how little many in the US (or indeed Europe) truly appreciate the ferocious future economic force this county represents. I don’t know if it’s because of arrogance, ignorance or ineptitude; but the lack of awareness about China’s future role in the global economy is staggering to most in America (and I venture Europe too).
 
Telling them China is the 2nd largest economy in the world doesn’t quite bring home the way this is going to go in the next 20 years. While US (& EU) politicians bicker and tie themselves in knots, China is slowly and methodically building alliances, investing with a multi-decade time horizon, and tightening its grip.
 
Take the “One Belt, One Road” initiative, a dramatic, gargantuan scheme that would open up new trade routes to China’s benefit. What does the US offer in return? Withdrawal from TPP, renegotiating NAFTA, and the possibility of bilateral deals!
 
I am not blind to China’s serious shortcomings. For me, a democratic vote and a free questioning press is worth much more than a new iPhone and a few points on GDP! 
 
But, it’s time for the West to recognize what is happening and react accordingly with greater investment in infrastructure, education, and productivity. It’s not a zero-sum game, but I suggest they start doing it now before it’s too late.

Richard.Quest@cnn.com 

What’s new… what’s next
 

By Matt Egan, Patrick Gillespie, Julia Horowitz
and Paul R. La Monica of CNNMoney

1. Church of England invests better than Harvard

The market gods have been very kind to the Church of England. Its endowment generated a 17% return last year, far outstripping most similar funds as well as the Dow Jones and S&P 500 indexes. Its gains also far outpaced Harvard’s endowment, which posted a 2% loss in its last fiscal year. The banner year for the Church was fueled by strong returns in emerging markets, private equity, timberland and forestry. 

2. These countries still want a Pacific trade deal

President Trump abandoned a Pacific free trade deal crafted by his predecessor. Now, the other countries involved want to rebuild it. Ministers from 11 nations — including Australia, Canada, Mexico and Japan — agreed over the weekend to try to revive the Trans-Pacific Partnership, which would dramatically reshape trade across the Pacific Rim. Economists remain wary, pointing out that the deal will be much smaller without U.S. participation.

3. Bitcoin is back! Digital currency at record high

It seems you’d have to be a blockhead to not bet on the blockchain. Bitcoin surged above $2,000 for the first time over the weekend and topped $2,100 Monday. Prices have more than doubled this year. Other digital currencies such as Ethereum and Ripple have popped too. Political turmoil in DC may explain why bitcoin is soaring lately. Bitcoin, like gold, isn’t backed by a government. But some investors worry bitcoin mania is another bubble that could soon burst.

4. US oil companies deepen Saudi ties

The US and Saudi Arabia may be fierce rivals on the global oil stage, but they also work together on the energy front. Aramco, the kingdom’s oil behemoth, signed $50 billion worth of energy deals with US companies during Trump’s visit. That includes everything from oil rigs and advanced drilling equipment to GE technology. The Saudis also agreed to spend $110 billion on defense contracts with Lockheed Martin, Boeing and other US military contractors. 

5. Quick Takes:

Elon Musk explains why Tesla can’t launch in India just yet 

Top Asian airline Cathay is cutting 600 jobs 

Zuckerberg says US tour doesn’t mean he’s running for office 

Ford fired CEO Mark Fields after disappointing stock performance 

6. What’s next:

Spring bounce for home sales? Numbers on new home sales, a key measure on the state of the housing market, are due out at 10 a.m. ET on Tuesday. Economists believe new home sales cooled off in April from the rapid pace witnessed in March.

Car parts and taxes: AutoZone will give investors a window into the car market when the parts retailer reports quarterly numbers on Tuesday morning. Later, Intuit, the maker of tax preparation software, is scheduled to post earnings. Look to see if Intuit weighs in on Trump’s efforts to rewrite the tax code.

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