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Week in review: Brexquit!
The tortuous saga of the UK’s attempt to leave the European Union took another twist at the start of the week, with the resignations of David Davis as Brexit minister and Boris Johnson as Foreign Secretary.
The spur for the ministerial departures was the ‘Chequers deal’ to which Theresa May’s Cabinet signed up at the weekend. Briefly, this looked like it had achieved a degree of unity. But the perception that the government’s proposals would result in a ‘soft’ Brexit sparked the resignations of Davis, Johnson and three junior ministers, and a week of political turmoil.
Devil in the detail?
On Thursday, the government published a white paper on its Brexit policy. This received a hostile reception from pro-Brexit MPs in Parliament. The paper was widely seen as softening some of the government’s previous ‘red lines’. It includes proposals for visa-free travel for EU students, tourists and those undertaking temporary business activity, as well as the easy movement of services and “talented people”.
Some City lobbyists were not impressed by the lack of specific provisions for the financial sector. But there was a more positive reaction from Simon Coveney, the Irish foreign minister, who hailed the white paper as “a step towards a much softer Brexit than some people had been advocating”.
Ups …
Perhaps perversely, the political turmoil was good news for the UK stock market. The pound fell on the news of Johnson’s resignation. This resulted in gains for the FTSE 100 at the start of the week, as many of the UK’s largest companies make most of their profits abroad and so benefit from a weak pound.
Other global markets opened the week well too. The S&P 500 was up on both Monday and Tuesday, when it closed at its highest level since February. Strong US jobs data helped to reassure investors alarmed by last Friday’s imposition of tit-for-tat tariffs on Friday by the US and China.
… and downs
But worries about the Sino-US trade war resurfaced on Wednesday, when the Trump administration announced plans to impose tariffs on a further $200 billion’s worth of Chinese goods. This caused a steep sell-off in most markets. A plunge in the oil price on Wednesday night added to the disquiet.
A recovery set in thereafter, however. This was just enough to leave most markets up by Thursday’s close. Overall, the FTSE 100 was up 0.4% for the week. The S&P 500 gained 1.4%. The FTSE World Europe ex UK had a particularly bumpy ride, but ended up by 0.5%
China in the bull shop?
Perhaps surprisingly, China had a better week than many other markets. Although its stocks joined the global slump on Wednesday, the CSI 300 rebounded by 2.2% on Thursday to finish comfortably up for the first four days.
What turned the buyers bullish? Stocks connected to 5G technology were particularly in vogue, as investors were encouraged by reports that telecoms titan ZTE had reached a deal that would allow it access to US suppliers once more. But the rally was broad-based, perhaps suggesting that investors are simply seeing value in a market that had fallen into ‘bear’ territory with a 20% drop from its January peak.
Facebook fine
Facebook’s misuse of its users’ data landed it with a £500,000 fine this week. The Information Commissioner’s Office (ICO) in the UK intends to impose the fine on the social-media giant for failing to safeguard the data that Cambridge Analytica obtained from Facebook. The ICO, which oversees data protection in the UK, is also bringing a criminal prosecution against Cambridge Analytica’s parent company, SCL Elections.
At a mere half a million pounds, the fine is hardly a problem for Facebook, which made profits of $15.9 billion in 2017. But it was the heaviest sanction available to the ICO. Shares in Facebook dipped on the news, but had resumed their upward course by the end of the week.
And finally …
What’s a ‘big fella’ to you?
Six feet? Six feet six?
To paraphrase Crocodile Dundee, “That’s not a big fella – this is a big fella!”
At fifteen feet five, ‘Big Fella’ certainly merits his nickname. It’s an impressive length – even for a saltwater crocodile.
This week, rangers removed the sizeable saltie from the Katherine River in Australia’s Northern Territory. His capture came after an eight-year hunt, on fears that he posed a danger to humans. As he’s thought to be at least 60 years old, Big Fella might be due his bus pass. But an estimated 1,300 lbs (or 600 kilos), he’s hardly frail.
Big Fella will live out the rest of his days on a crocodile farm. But before you embark on a swimming trip to the Katherine, it’s worth reflecting that his fellow salties are thought to be thriving in the Northern Territory’s river system. And with recorded lengths of over 20 feet, they can get even bigger!
