This week: Trump at Davos, U.S. equities close high and air not yet clear for Sky
All eyes were on Davos, a small town in the Swiss Alps, as world leaders, business people and other VIPs congregated to share perspectives on the theme of “Creating a Shared Future in a Fractured World.”
This theme followed on from Chinese President Xi Jinping’s speech at last year’s World Economic Forum, when he highlighted the benefits of globalization and warned against the protectionism espoused by U.S. President Donald Trump. Angela Merkel echoed Xi’s sentiment this year, as the German Chancellor warned about the rise of “national egotism.”
Trump is the first U.S. president to set foot in Davos since Bill Clinton back in 2000. Trump waxed as lyrically as only he can, his main topic being a robust defence of his “America first” philosophy. He predicted a “tremendous increase” in UK-US trade and his on-off visit to the UK now appears to be on again, as UK Prime Minister Theresa May finalized details of a working visit later this year. On Thursday, she touched on the benefits and threats of the rise of technology and artificial intelligence (AI).
Elsewhere, Canadian Prime Minister Justin Trudeau announced that Canada would not follow the U.S. in cutting taxes and red tape, stating: "We are in a new age of doing business – you need to give back." In a well-received address, Trudeau also highlighted the issues of women’s rights and called to an end to gender inequality.
U.S. equities soar
The Dow Jones Industrial Average (DJIA) and S&P 500 indices both closed at their highest levels ever on Thursday, boosted by strong quarterly earnings and economic data. Meanwhile, the FTSE All Share index was down 1.3% over the week to Thursday’s close as stronger-than-expected UK employment data led to a strengthening pound, which hit companies that earn the bulk of their profits overseas. In Europe, the FTSE World Europe Ex-UK index ended down 0.7% amid investor concerns over Trump’s protectionist stance.
Sky’s future still in the air
The UK’s Competition and Markets Authority (CMA) provisionally ruled that 21st Century Fox’s proposed acquisition of Sky is not in the public interest on grounds of media plurality. Given Fox co-chairman Rupert Murdoch’s ownership of part of Sky, together with the Times, Sunday Times and the Sun newspapers, the CMA argued that the deal would give it too much influence over public opinion and the political agenda. Fox said it was “disappointed” by the CMA’s provisional findings.
The announcement followed Disney’s part acquisition of 21st Century Fox for $52.4 billion in December last year. If Fox’s planned acquisition of Sky goes through, it’s likely that Disney would take full control of Sky, including Sky News. The deal would add to Disney’s wide range of media and leisure holdings, which in the U.S. include ESPN, Lucasfilm and Pixar.
“Be prepared” is a motto that must be familiar to anyone who’s ever been involved in the Scouting movement. This week, however, “preppers” – a term informally assigned to those who have really taken the axiom to heart – must be, if not exactly pleased, at least telling apocalyptic-type jokes like there’s no tomorrow. On Thursday, it was announced that the Doomsday Clock – a metaphorical contrivance, devised by The Bulletin of Atomic Scientists more than 70 years ago – has moved 30 seconds closer to midnight, otherwise known as man-made Armageddon. The clock’s minute hand now sits at two minutes-to-meltdown, a time it last struck in 1953 when the U.S. and Soviet Union were racing to develop the hydrogen bomb. Tensions between North and South Korea and growth of nuclear weapons in China, India and Pakistan were cited as key reasons for the ominous indicator. Europe didn’t feature prominently on the list of provocations, so let’s hope it’s not The Final Countdown.
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