The Force Is Strong With Microsoft as Amazon Falls to the Dark Side
A long time ago in a galaxy not too far away… Another hectic week in the world of finance is upon us! We’re here, as always, to bring you our unique take on a potentially market-moving story, as well as a round-up of all of the important dates for your trading calendar this week. Let’s go!
Microsoft beats Amazon to bumper US ‘Jedi’ deal
As epic battles go, this one was pretty gigantic. Up for grabs was a tasty $10bn (£8bn) cloud-computing, AI-focussed contract for the Joint Enterprise Defence Infrastructure (Jedi). The contenders? Two of the biggest tech companies in the galaxy, Microsoft (MSFT) and Amazon (AMZN). EPIC!
Cutting to the chase, the Pentagon decided to award the contract to Microsoft, following a heavily scrutinised bidding process, which previously included heavyweights such as Google, IBM and Oracle, and to which Amazon had been seen as the favourite.
Wait, what is ‘Jedi’?
Sadly, it’s got nothing to do with green, pointy-eared dudes. Sorry to disappoint! The 10-year contract is aimed at making the US defence department more technologically agile, cloud-computing, AI and everything else between. It’s the contract of the century (so far).
What went wrong?
Amazon were leading the chase for the contract until President Trump began questioning the fairness of the process. In July he told reporters that he was getting “tremendous complaints” about Amazon, regarding the Pentagon contract. Amazon, who stated that it was shocked by the decision, has 10 days to decide whether or not to launch a challenge.
What happened to the markets?
The Jedi award sent Microsoft shares up 3% in after-hours trading on Friday; Amazon’s stock dropped down by 0.8%.
It’s very early days, but some analysts are already lauding Microsoft’s win is a game changer that could have a ripple effect for the company’s cloud business for years.
This is definitely one to watch out for. Cloud computing is already big business, and more than 5,000 government agencies use Amazon Web Services (AWS). Will they now come under pressure to look elsewhere, too? Only time will tell…
What’s up this week in Forex?
Here’s our usual smattering of super-important trading events that are coming up this week. We recommend keeping all of these guys on your radar:
● Things will start to hot up on Tuesday as the US National Association of Realtors (NAR) release their Pending Home Sales Report (USD). Later in the day, AUD traders will likely have their fingers on the pulse for the Consumer Price Index (CPI) release, which measures the change in the price of consumer goods and services. It’s a key measure of Australian inflation.
● Wednesday is a veritable banquet for traders! Get ready for all of this:
○ German Unemployment Change (Oct) (EUR);
○ US GDP for Q3 (USD);
○ The Bank of Canada will release its Monetary Policy Report, it’s Interest Rate Decision AND hold an official Press Conference on both of those (CAD);
○ We’ll also have something similar in the US, with the FOMC Statement and Fed Interest Rate Decision (USD);
○ China will announce its Manufacturing PMI (Oct) (CNY);
○ …If that’s not enough, the Bank of Japan is also due to announce its Monetary Policy Statement and Outlook Report (JPY).
● Canada will announce its GDP MoM (CAD) on Thursday.
● Finally, we’ll close the week with the UK’s Manufacturing PMI (GBP); and the big three from the US — Non-farm Payroll (MoM), Unemployment Rate (MoM), and the ISM Manufacturing (MoM) (USD).
So, a pretty quiet week, then… Or not!
All of these events have been known to cause high volatility in the forex markets, so they have the potential to represent fairly good opportunities. Don’t forget, a good investor is a smart one who uses all of the information at their disposal, so make sure you continue reading around all of these topics!
NOTE: It goes without saying that you should keep an eye on the ever up and down Brexit process. It’s impossible to predict what’s going to happen from one moment to the next and if there’s one thing that has a tendency to breed volatility, it’s unpredictability!
The Contentworks Team