Extreme Form of Censorship

Dear valued client,
Markets lost ground following a week of intense political news. 
In a shocking event last weekend, 20-year-old Thomas Matthew Crooks attempted to assassinate former President Donald Trump at a rally in Butler, Pennsylvania. Crooks, the son of behavioral health counselors and had no prior criminal record, fired multiple shots from the roof of a nearby office building. Secret Service agents swiftly neutralized the gunman, but not before a volunteer firefighter, Corey Comperatore, was killed while protecting his family, and two other attendees were injured. The attack has placed the Secret Service under intense scrutiny, with House Speaker Mike Johnson calling for a thorough investigation. Prominent business leaders, such as Elon Musk and Bill Ackman, publicly endorsed Trump following the attack, marking a significant shift in corporate support. The incident has led to comparisons with Ronald Reagan’s approval surge post-assassination attempt in 1981, with Trump’s odds of winning the election rising sharply on prediction markets. However, the long-term political impact remains uncertain.  
In an effort to garner support of his own, President Biden proposed a plan to cap rent hikes at 5% annually for two years, targeting corporate landlords with over 50 units by ending their tax credits if they exceed this limit. This proposal aims to assist the 20 million rental units affected, as nearly half of all U.S. renters are currently burdened by housing costs, spending over 30% of their income on rent and utilities. While critics argue that rent control could disincentivize the development of affordable housing, Biden’s administration views it as a temporary measure until the anticipated influx of 1.6 million new housing units helps stabilize prices. Additionally, Biden announced $325 million in grants for home-building in seven cities and plans to repurpose federal land for affordable housing. Despite potential congressional hurdles, the administration is committed to pushing this policy, particularly if Biden secures a second term.  

Rumors of a potential change in Canada’s Finance Minister have surfaced, with sources within the Prime Minister’s Office expressing dissatisfaction with Chrystia Freeland’s ability to promote the intended economic message. Speculation has grown around former Bank of Canada and Bank of England governor Mark Carney as a possible replacement. Although Prime Minister Justin Trudeau has neither confirmed nor denied these rumors, he has acknowledged his long-standing efforts to recruit Carney into federal politics. Freeland, currently the Deputy Prime Minister, has not commented on her future role, though she has been reassured her position is safe for now. Critics argue that the issue lies more with the policies than with Freeland’s communication skills. A switch to Carney could signal a shift towards addressing fiscal concerns and improving productivity, aligning with Carney’s previous criticisms of the government’s budget. As the political landscape evolves, Freeland’s future in her current role remains uncertain, especially with a potential cabinet shuffle on the horizon.  

After a robust start to 2024 with a 25% rise in the tech sector, chipmakers faced a significant setback on Wednesday as Wall Street’s semiconductor index plummeted by over $500 billion, marking its worst day since 2020. This drop was triggered by potential U.S. export restrictions targeting China’s chip industry and former President Donald Trump’s comments on Taiwan’s defense payments, which unsettled investors. The Biden administration is considering the foreign direct product rule, potentially restricting exports of any product using American technology. Taiwan Semiconductor Manufacturing Co. (TSMC) and Nvidia experienced substantial losses, with ASML, the largest supplier of chipmaking equipment, dropping nearly 13% due to its heavy reliance on Chinese sales. In contrast, Intel and GlobalFoundries showed resilience, benefiting from recent investments in U.S. manufacturing. Uncertainty in the political and policy realm will continue to add volatility to the semiconductor industry. 

“Assassination is the extreme form of censorship.”  – George Bernard Shaw

Have a terrific weekend,
PW

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