What’s going on?
Last Friday, Fed released its semiannual report. Fed’s report shows its thinking, which can have huge impacts on global economy
Zooming out
While the reports cover many topics, the three most worth-looking are US manufacturing, monetary rules and the Coronavirus epidemic.
- US manufacturing: Last year’s manufacturing drop was relatively mild.
- Monetary rules: rules are meant to be broken when uncertainty takes place.
- The Coronavirus epidemic: It could have a global impact, but only in the short-term.
What’s going on?
On Monday, Swedish carmaker Volvo announced it’s in talks with China’s Geely Automobile to combine the two businesses into one all-powerful auto giant.
Why should I know?
- Dealmaking in the auto sector is growing significantly last year, in response to the transformation of the industry as the need for big investment to EV is climbing.
- Benefits: extensive combined expertise, cost synergy (very large in auto industry), extra manufacturing for Volve and higher brand equity in Europe for Geely.
- Gee’s plan to enter Europe might be a sensible strategy: the Coronavirus outbreak causes anxious Chinese consumers to stock up on household goods, and less likely to fork out big sums for cars and the like.
- #insurance The French insurer Covea held an exploratory talk to buy reinsurer PartnerRe for $9B (Finimize)
What’s going on?
The title tells all. This is a normal acquisition in insurance industry
Why should I know?
- We know what insurers do, but what about reinsurers? They are the one who cover some of the risks for insurers.
- Funnily enough, insurers often make a loss on selling insurance policies, they invest the money their policies bring in to make money.
- Interest rates are so low, insurers aren’t making as much on relatively safe investments. Then firms like Covea are trying to grow and diversify.
Huy Luu's business blog 