Highlights of the Week of December 3, 2018

Dear PGM Capital Blog reader,

In this weekend blog edition, we want to discuss some of the most important events that happened in the global capital markets, the world economy and the world of money, in the week of December 3, 2018, as follows:

• DOW Jones Industrial Dropped 1,565 points in the week of December 3, 2018.
• Altria buys 45% in Cannabis producer Cronos.

DOW JONES DROPS 1,565 POINTS:

Worries about the US-China trade war unleashed another round of heavy selling on Friday, December 8, capping off a brutal week on Wall Street.

As can be seen from below chart, the Dow fell approx. 559 points, or 2.24%, on Friday as investors were left confused by conflicting messages coming out of the White House on the trade negotiations with China.

For the week, the Dow plunged 1,565 points, or 6.03%, as can be seen from above chart.

ALTRIA BUYS 45% IN CRONOS GROUP:

On Friday, December 8, Marlboro maker Altria Group Inc. (NYSE: MO), announced that it will invest US$2.4 billion in Canadian cannabis producer Cronos Group Inc. (CRON.TO), – marking a major foray by Big Tobacco into the pot sector –  as the global market for weed continues to grow.

The deal gives Altria an up to 45 percent stake in Cronos and is the latest in a string of investments from consumer companies hoping to benefit from Canada’s move to legalize marijuana for recreational use.

Based on the news, shares of CRONOS rose with CAD 3.08 or 22.03 percent to an all time high of CAD 17.06 a share, as can be seen from below 2-year chart.

PGM CAPITAL’s ANALYSIS & COMMENTS:

DOW JONES Drops:

US stocks had been trading higher earlier Friday, but the market turned sharply lower after Trump administration officials seemed to contradict each other on trade.

Worries about the negative consequences of the trade war and hopes for progress have launched Wall Street on a wild ride of late.

The US-China ceasefire sent stocks soaring on Monday, yet doubts about the truce helped knock the Dow nearly 800 points into the red on Tuesday. Continuing on, the Dow plunged 785 points on Thursday before staging a comeback.

Below Chart shows the performance of China’s CSI-300 Index last week, in which we can see that it only lost 1.8 percent in the week of December 3rd, which might be an indication that the market believes, that an escalation of the trade war between the USA and China, might hurt the USA more.

The Altria – Cronos Deal: