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Made in China no more?The trade war is turning granular. Tariff increases and poor relations between the US and China are old news, but this week more specific machinations made headlines. The Trump administration may ‘blacklist’ Chinese video surveillance company Hikvision, preventing it from buying US components. This news caused Hikvision’s shares to fall sharply in early trading in China, though they mostly rebounded by close. While the ban on Hikvision is still under consideration, similar restrictions are already in place for telecoms companies Huawei and ZTE. Curbing Hikvision’s US activities could be detrimental both to the company and to the wider Chinese economy.
The tensions spelled a tough week for both US and Chinese markets. The S&P 500 Index was down 1.3% for the week to Thursday’s close. Meanwhile, the Shanghai 180 Index fell 1.5%.
Rock the vote
With 900 million eligible voters, India has the world’s biggest electorate. After a six-week long process, as expected, Narendra Modi was re-elected as the country’s prime minister on Thursday. Mr Modi’s landslide victory has given his Bharatiya Janata Party a strong mandate to continue with his reform agenda. Since he was his first elected in 2014, Modi and his government have simplified the Indian tax system, addressed corporate insolvencies and been generally supportive of business. Indian risk assets responded positively, although current valuations are rich.
Meanwhile, 16 million or so Australian voters also went to the polls. Last weekend voters returned the incumbent Liberal party-led coalition to power. The result lifted both Australia’s equity market and its dollar. Pollsters had predicted a change of government.
The end of May – in June
In the UK, Prime Minister Theresa May laid out a new Brexit deal. Bet you’ve heard that one before! What sets this deal apart from its failed predecessors, however, is the prospect of a second referendum on the whole Brexit undertaking.
Parliament was scheduled to vote on the new deal in early June. It's questionable if and when it will take place, however. Certainly, the initial reaction from all sides has been hostile, including from those supporting a second referendum. On Friday morning, Mrs May said that she would resign as leader of the Conservative Party on 7 June. She will remain prime minister until a leadership contest takes place.
Thanks to the uncertainty, sterling continued to slump. UK shares were affected, too: by close on Thursday, the FTSE 100 Index had fallen 1.6%. European markets also dropped, reflecting concerns about slowing global growth. The FTSE World Europe (ex UK) Index was down 2.1%.
Airlines worldwide have a bone to pick with Boeing. The plane manufacturer’s stock is down nearly 20% since early March, when its 737 Max aircraft were grounded following two crashes. The airlines are grumbling that grounding the planes has been costly and are demanding compensation from Boeing. On Thursday, US aviation officials and regulators met to discuss plans to get 737 Max planes back in the air.
Amazon held its shareholder meeting this Wednesday, when it addressed an uncharacteristically high number of shareholder resolutions – 12 in all. These resolutions covered subjects including facial recognition technology, gender inequality and climate-change-related policies and practices. Facial recognition technology has been a controversial but hot topic recently. Critics claim that the possibility of false matches may be a threat to civil liberties. The resolution in this topic was voted down.
Deutsche Bank is in trouble and its share price fell to an all-time low on Thursday. The German lender has been struggling since the start of the global financial crisis and has endured much negative publicity in recent years. All in all, it’s been a tough week for many markets around the world.
And finally… Winter came… and went…
It’s been a newsworthy week for the US, China, India, and the UK. But little birds are telling us that this week’s water-cooler talk has been focused much more heavily on the goings-on in Westeros, the fictional setting of HBO’s hit series Game of Thrones.
The show, which debuted nine years ago, chronicled the bloody fight for the Iron Throne, the highest seat of power in Westeros. Along the way, it’s amassed an enormous following worldwide. But its eighth and final season has been controversial – more than one million fans are unhappy at how their favourite watch has ended. They have signed a petition to “remake Game of Thrones season eight with competent writers.” But controversy aside, a network-record-breaking 19.3 million people tuned into the series finale this week.
For better or for worse, the end of Game of Thrones marks the end of an era for millions of fans and a major landmark in TV history. Love it or hate it, there’s no doubt you’ve heard of it – such is the might of its fandom. Maybe there really is nothing more powerful than a good story. At least this one didn’t drag-on for too long.