SINGAPORE SWING: On the heels of three American detainees being freed, President Trump and North Korean leader Kim Jong Un agreed to meet on June 12 in Singapore. Trump has originally proposed meeting in the DMZ, but we suspect that was scuttled due to security issues. Trump has become more optimistic when discussing prospects for the summit - at the same time adding an element of caution in the event plans to denuclearize North Korea go awry. The outlook for ‘plan b’ is, well, unclear. To help us wade through the media noise and get down to brass tacks on the chaotic U.S. security environment in both North Korea and Iran will be Hedgeye's own General Emo Gardner with special guest Dr. James Miller, the former Undersecretary of Defense and one of the U.S.'s top strategic defense policy minds. Please find the call information for next Tuesday, May 15 here. Keep your eyes peeled in this space for a piece by General Dan Christman on these hotspots.
DEADLINE NAFTA: As recently as last week, we spoke to people close to the NAFTA talks who weighed in that talks were moving in the right direction with Administration officials becoming more optimistic that a deal was within reach. What a difference a week makes. Now, with a little less than a week to go with a May 17 deadline to secure Congressional approval looming (without messing up the Capitol Hill’s Christmas holiday plans), negotiators from the U.S., Mexico and Canada are still scrambling to resolve longstanding disputes over auto rules of origin and renewal of the treaty every five years as well the elimination of dispute settlement panels. Should next week’s deadline be missed, options for advancing NAFTA become more limited – and riskier. Not only will the political seasons in Mexico and the U.S. come into play, Trump has to content with July 1 expiration of Trade Promotion Authority and with that his ability to send the pact to Congress for a straight up or down vote without amendments. We remain cautiously optimistic that a deal will be reached.
SCOTUS OUTLOOK: The Supreme Court wrapped up oral arguments back in late April and a floodgate of major decisions will soon open up with consequences felt across the policy, political and business landscapes:
- The potential for the fate of DACA and the “dreamers” brought here as undocumented children as well as Trump's executive order banning travel from a cluster of mainly Muslim countries.
- Redistricting cases in both Maryland and Wisconsin as well as a racial gerrymandering case in Texas - all with ramifications for control of the House of Representatives this fall.
- A decision on SCOTUS's 40-year-old precedent allowing public employee unions to collect fees from the non-members it represents in collective bargaining should be overturned.
- Sports betting, a decision that could green light sports betting across the nation, a potential boost to gaming interests and broadcasters. Read the latest by Paul Glenchur from Hedgeye’s Legal Catalysts vertical here.
- AmEx, an antitrust ruling that could weaken maintenance of AmEx interchange fees and boost card competitors like Discover Financial.
- Internet Sales Tax, although a very close call, a decision that could allow states to collect sales taxes from remote sellers like Wayfair and Overstock.com
THE MAVERICK MUDDIES THE WATER: Senate Armed Services Committee Chairman John McCain (R-AZ) said the Senate should reject the nomination of Gina Haspel to lead the Central Intelligence Agency, citing her refusal to acknowledge "torture's immorality." McCain, who was tortured as a prisoner of war in Vietnam, issued his statement hours after Haspel testified before the Senate Intelligence Committee in both open and closed settings and after the path appeared to clear for her confirmation with an announcement of support from Senator Joe Manchin (D-WV). The week ends with a number of Republican Senators still uncommitted and the ailing McCain’s words fresh in their minds.
REPUBLICAN-LED DISCHARGE? A group of moderate House Republicans - Carlos Curbelo of Florida, Will Hurd of Texas, and Jeff Denham and David Valadao of California - filed a discharge petition that would force a series of votes on different immigration bills if 218 members sign on. Republican leaders are working to shut down the effort, with House Speaker Paul Ryan speaking with many of the centrist Republicans involved in the issue – this issue stands to get trickier for Ryan and the Republicans over the next week.
CHINA CALL INVITE: Join us for an exclusive call next Wednesday, May 16 with the recent Ambassador to China and former U.S. Senator Max Baucus on the heels of his week-long trip to China. Find the call details here.
TRUMP’S IRAN DECISION| Our Senior Energy Policy Analyst Joe McMonigle summarizes the Trump Iran oil sanctions, the impact on oil markets and next steps. Listen to the replay here.
POPPING THE GROSS TO NET BUBBLE | Senior Healthcare Analyst Emily Evans gives her best guesses for Trump's big drug speech scheduled for later today. Read her piece here.
