• S&P 500 Hits Record High: Investors Breathe a Sigh of Relief as Trade War Thaws
• Grubhub Muscles in on Mom & Pop
• Trump Takes a Stroll in North Korea
• Bond King: Trump Won’t Make it to 2020

 TRADE WAR 

S&P 500 Hits Record High

Investors Breathe a Sigh of Relief as Trade War Thaws

The S&P 500 soared like a majestic eagle stuffed with the financials of 500 U.S. companies after a not terrible weekend of trade negotiations with the Chinese.

The benchmark index opened at a new intraday peak of 2,971.41 this morning, surpassing its previous record of 2,964.15.

The DJIA rose 205.90 points at the opening bell, while the Nasdaq Composite gained 139.61 points.

The surge was led by tech stocks which rallied on news of a thaw in trade relations between the U.S. and China. (Apparently, all we had to do was leave trade relations on a plate in the sink overnight.)

President Trump met with Chinese President Ji Xinping at the G20 summit in Osaka, Japan this weekend. After an hour-long discussion, the boys were able to put their differences aside and agree to hit the reset button on trade negotiations.

In a Sunday interview with human-bowtie-rack Tucker Carlson, President Trump said: “We had a very good meeting. He wants to make a deal. I want to make a deal. Very big deal, probably, I guess you’d say the largest deal ever made of any kind, not only trade.”

Until the talks are resolved, the tariffs already in place will remain. However, the White House will not be going ahead with additional tariffs of 25% on $300 billion in goods.

Trump also agreed to ease off its ban on Chinese telecom company Huawei, allowing U.S. companies to sell equipment to the smartphone maker again.

In return, Trump said, China agreed to buy a “tremendous amount” of American agricultural products. “We will give them a list of things we want them to buy.”

Huawei: Friend or Foe?

If you’re a frequent reader of One Last Thing, you’ll know that I’m not a fan of Huawei or its practices.

But one of our senior analysts is. He believes penalizing Huawei is a big mistake that will come back to bite us in the ass in the long run.

Now, I may not always agree with him (I don’t agree with many folks as it happens). But this analyst also happens to be George Gilder, America’s No. 1 futurologist.

He predicted the iPhone 13 years before it happened. He’s the man who showed President Reagan his first microchip and told him “this is the future.”

So when he talks about future tech, I listen.

Here’s what George has to say about this whole Huawei mess:

We should not be blocking Huawei from doing business with American companies.

Quite the opposite…

We should be embracing the company and its technology leadership.

Technology innovation cannot progress without learning. And we have much to learn from China, specifically, founder of Huawei, Ren Zhengfei.

In three decades, Mr. Ren turned the equivalent of $3,000 into China’s telecom-equipment champion and a multinational colossus.

Huawei boasts $105 billion in annual revenue, operates in 170 countries, and employs 180,000 people.

Its finance division, run by CFO (and Mr. Ren’s daughter) Meng Wanzhou, is staffed by hundreds of graduates of Harvard, Cambridge, Wharton, and Yale.

The company boasts some 2,300 patents in 5G technology. And it has purchased more than $11 billion worth of microchips from U.S. companies like Intel and Broadcom.

With a steady stream of news stories about data breaches and international hacking, people have grown understandably nervous about what the future holds for personal privacy, economic growth, and national security.

That cannot be ignored.

But a ban on Huawei is not the answer.

If U.S. telecom companies and network managers are worried about Huawei, they should ask to see the company’s software source codes.

If consumers interpret the continual pattern of software upgrades as a threat to privacy, Washington should assign the role of managing them to domestic telecommunications companies.

In the end, however, erasing the fear of cyber-attacks will require the development of a new and secure internet architecture.

The good news is that technologists around the world are developing such a system.

George is going to reveal that new system — and the No. 1 tech stock to be invested in right now — tomorrow July 2 at a special event at 1 PM EDT.

The event is completely free to watch. You just need to reserve your place.

Click here to sign up for the event and you’ll get a free subscription to Gilder’s Daily Prophecy — the only place to read George’s insights and predictions daily.

Disclaimer:Clicking the above automatically adds you to our private subscriber list to receive Gilder’s Daily Prophecy as a free bonus after the Tech Profits Summit. You can read our privacy policy here, and you can opt out at any time, at your own risk.

 GIG ECONOMY 

Grubhub Muscles in on Mom & Pop

Grubhub is buying up thousands of web addresses for mom-and-pop businesses and… (I can’t legally say they’re squatting on them. But, you know. WINK).

According to a report by Newfoodeconomy.org, the always-soggy-food-delivery app has bought more than 23,000 web domains, all relating to independent restaurants that use its delivery service.

In many cases, Grubhub has built shadow websites on these domains that compete directly with the restaurant’s own website.

These shadow websites are designed to look like the restaurant’s own website (but lack the charm of a classily bad restaurant website).

But when you try to order that weird thing you’re too ashamed to order in person, you’ll be redirected to the restaurant’s page on Grubhub.

Now, who cares if folks are buying through Grubhub or directly from the business? Isn’t the restaurant making money regardless?

No. (Or as they might say in an authentic Italian restaurant listed on Grubhub, “no.”)

According to an anonymous restaurant owner interviewed by Newfoodeconomy.org, restaurants end up with an estimated 30% less after Grubhub takes its share of the profits and adds marketing fees and additional promotion costs.

Despite processing a higher than average amount of orders, this restaurant owner said she has trouble making ends meet at the end of the month after she pays Grubhub.

“It’s putting us in a financial hole. Last month, I paid [$8,000] to GrubHub. That’s my rent for the month,” she told Newfoodeconomy.org.

Grubhub has since responded, saying it creates these “microsites” to “increase their online brand presence.” But in many cases, these websites are competing directly with the restaurant’s real (and always mind-bogglingly tacky) website.

With the full weight of Grubhub’s marketing machine behind them, you’re more likely to stumble across Grubhub’s website first even if you search for the restaurant directly (which banks them a fat “advertising commission”).

In its statement, Grubhub said it’s the company’s policy to release these domains to restaurants if asked. But that glosses over the fact that it created these shadow sites without folks’ permission and many operate without the restaurant owners’ knowledge.

As Stacy Mitchell, co-director of the Institute for Local Self Reliance, told Newfoodeconomy.org: “You have Grubhub coming in and inserting itself between a restaurant and a customer in a way that, obviously, isn’t chosen by the restaurant and isn’t to the restaurant’s benefit.

“I just feel like this is a sort of pattern — whether it’s the way in which Uber and Lyft have reoriented the taxi service so they’ve basically positioned themselves as a gatekeeper and compelled everybody to operate in their system, and thereby get to take a large chunk of the revenue when they’re adding very little value compared to how much they take.”

What do you think? Is this a symptom of a larger problem with how the gig economy treats small business? Or should Grubhub be entitled to chase that paper as long as its funneling business to restaurants?

Click here to shoot me an email and we’ll feature the best responses in the Readers’ Comments section.

 NORTH KOREA 

Trump Takes a Stroll in North Korea

Donald Trump made history yesterday, becoming the first sitting U.S. president to visit North Korea. (Well, it was more of a “pop by” than a full-blown visit. But still, historic.)

President Trump stepped into North Korea at the border of the demilitarized zone and hung out with North Korean dictator Kim Jong-un for about 45 minutes.

Through an interpreter, Kim told Mr. Trump: “I never expected to meet you in this place.” (Do you come to the demilitarized zone often?)

Back inside the Freedom House (which, I was disappointed to learn on my trip to the DMZ, is not an American-themed restaurant), President Trump told journalists that Kim had agreed to restart negotiations with the U.S. and work towards the full denuclearization of the Korean peninsula. (But like, chill. We’ll get to it eventually.)

“Speed is not the object,” said President Trump. “We want to see if we can do a really comprehensive, good deal. This was a great day. This was a very legendary, very historic day… It’ll be even more historic if something comes up, something very important.”

During his brief visit, President Trump extended an invitation to Kim to visit the White House if he happened to be in the neighborhood. (Which is only the polite thing to do when someone invites you into their isolated nation of exile.)

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In Other News

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ONE LAST THING

Bond King: Trump Won’t Make it to 2020

According to economist Jim Rickards’s mathematical model, President Trump has a 65% probability of winning the 2020 election.

But DoubleLine Capital CEO Jeffrey Gundlach (AKA “The King of Bonds”) says that Trump might not even run.

In an interview with Fox Business, Gundlach said that Trump will win a second term as long as the economy remains healthy. But if there’s a recession between now and then, a campaign would just be a waste of money.

“I am not even sure he’s going to really run,” he told Fox Business’s Neil Cavuto. “If the economy goes into recession and he can’t pull out by removing the tariffs, there’s very little for him to run on.

“Lyndon Johnson ran for a while too and then pulled out because of the war problems… Things can change.”

And how likely is one of those good old recessions?

Gundlach predicts a 40% to 50% chance of a U.S. recession within the next six months and a 65% chance of a recession in the next 12 months.

We’ve mentioned here in the past that Trump’s entire 2020 campaign will sink or swim on the strength of the U.S. economy.

But I don’t think there’s anything on this planet that would make Donald Trump drop out of a presidential race. Rain? Shine? Low polling numbers? He’ll be here.

MARKET MOVEMENTS

Closing Data for 6/28/19

DJIA	$26,599.96	↑ 14.03%
S&P Index 500	$2,941.76	↑ 17.35%
NASDAQ	$8,006.24	↑ 20.66%
Gold	$1,412.50	↑ 9.95%
Silver	$15.34	↑ 0.31%
Bitcoin	$12,349.00	↑ 10.26%

• Japan resumes commercial whaling after a more than 30-year hiatus.
• The value of business acquisitions in the U.S. exceeds $1 trillion for the first time, thanks to high-ticket deals (“megamergers”) in the first half of 2019.
• Suburbs now account for 14 of the 15 fastest-growing U.S. cities with populations over 50,000.

READER COMMENTS

Click here to send us your comments and tell us what you think. Do you agree with us? Do you think our ideas are stupid? Bring it on. We can take it.

On Friday, I asked you for your hot takes on the Democrat debates. We got so many emails, we might have to carry this conversation over to tomorrow:

Paraphrasing Henry Kissinger’s comment on the Iran-Iraq War, “Too bad they can’t all lose.” — Raymond J.S.

Reading the comments, I’m amazed that the Dumocratic party has so many nano brained candidates. So far, Kamala Harris appears the smartest, however she got where she is through political pandering. She switched opinions and judgements while AG of Catastrifornia, mostly in favor of the rich and famous. This catapulted her into a Senatorial seat in 2017. Now she wants the White House. God, please help us!! — John G.

Bernie Sanders seemed the most prepared for the debate and the most prepared to be a President that will make a Major difference for working class Americans. Mayor “Pete” sounded like a Republican saying I don’t want to pay tuition for rich College kids. How many “Really Rich” college kids go to State supported Universities? — Delores D.

I was disappointed that I did not hear any of the group mention pot legalization nation wide. Am a 20 year United States Navy veteran and I have been diagnosed with PTSD. Currently Vape in order to get any sleep. I am all for complete legalization and full taxation of all marijuana products. I encourage Florida’s Governor Ron to fully recognize any and all legal marijuana certifications, etc. To my mind this makes sense; since Florida is the #1 tourist destination in the world! All those TAXES!! — Kenneth L.S.

Hey Ken. Unfortunately, I don’t think we’re going to hear much about weed in this election. Members of both parties pretty much agree it’s time to legalize (so it’s not a good “us versus them” story) and nobody wants to be the first to step forward as the “drug candidate.”

Perceptions have changed around marijuana use but you still risk losing a large portion of your voter base if you come out as pro-weed. If you’re looking for pro-weed Dem candidates, both Cory Booker and Elizabeth Warren have campaigned hard for a bill that would give states the right to legalize.

Cheers,

Shane Ormond
Editor, One Last Thing

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