Now we know it’s risky
Equity markets have taken a turn for the worse following the US’ probable imposition of “section 301” tariffs on China. Undoubtedly, events that increase uncertainty about the likely path of profits are bad news for any company’s share price. In a sense, given that the likelihood of President Trump’s action was high and much-discussed particularly in the last two weeks, some might say that this path should have been discounted by the market already.
A turning point for technology stocks?
The technology sector was one of the darlings of the post-Trump equity market rally, leading the gains in many markets worldwide. This week, technology stocks have reappeared on investor’s radars, but this time for all the wrong reasons.
Brexit Agreement Reached
A draft agreement on Britain’s exit from the EU was reached this week, with negotiators from both camps announcing the document on Monday. 18 months after the referendum result, the type of Brexit we will get has finally become clearer. Crucially, a transition period of effective UK membership in the trading bloc after the official exit date in 2019 has been confirmed. EU law will remain in place in the UK in full until at least January 2021, so that the perilous ‘cliff-edge’ scenario for businesses unsure about their future trading conditions can be avoided.
Geopolitical Tensions Rise: Conflict on the horizon?
The Republican and Democratic parties in the US reached a $1.3tn budget deal on Wednesday night, rolling out large spending increases in a number of departments. The compromise plan now needs to be passed by Congress before Friday night, if the perennial federal government shutdown is to be avoided. It’s a big boost on the previous budget, with some sources reporting that it will increase the federal budget deficit by $320bn over the next decade.
On Thursday 22nd, Donald Trump announced further tariffs on around $50bn worth of Chinese imports under the auspices of national security.
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