“We do not believe in untrammelled free markets.” Perhaps an unlikely proclamation from a Conservative leader, but these words were uttered by UK Prime Minister Theresa May when launching the party’s general election manifesto. Mrs May appeared to turn her back on Thatcherite free market economics when she promised curbs on foreign takeovers of domestic companies; proposals to rein in executive pay; and the imposition of higher fees on companies who recruit non-EU staff. However, the UK stock market was largely unmoved. The international orientation of the FTSE 100 is often more important than domestic considerations, and global factors drove the index to a new record high of 7522.0 during the week.
Pumping up the market
Energy stocks BP and Royal Dutch Shell reaped the benefit of Russia and Saudi Arabia’s vow to do “whatever it takes” to reduce oil stockpiles and stabilise the market. The joint statement by the world’s largest oil producers sent oil prices up 4% to $52 a barrel. Elsewhere, there was a broader rally in commodity markets. Mining stocks received a fillip after China said its new ‘Silk Road’ initiative would involve spending $124 billion on infrastructure. FTSE 100 constituents Anglo-American, BHP Billiton and Glencore were among the biggest beneficiaries as copper, aluminium and gold prices rose.
Globally, the continuing controversy surrounding US President Donald Trump’s dismissal of the head of the Federal Bureau of Investigation had more of an effect on equities. The S&P 500 fell 1.8% on Tuesday – the US equity index’s biggest one-day fall since September last year. Suggestions that Trump could face impeachment put a big dent in investors’ hopes that he will be able to enact infrastructure and tax reduction plans that would boost the US economy. Over the week to Thursday’s close the S&P 500 was down 1.05% while the FTSE World Europe ex-UK was down 1.93%. Meanwhile, the FTSE 100 was up 0.01%.
Back in private hands
In the UK, the government sold its remaining stake in Lloyds Banking Group, closing the book on one of the biggest bailouts of the financial crisis. The reprivatisation of Lloyds comes nearly a decade after its £20.3 billion taxpayer-backed rescue. The government, which initially took a 43% stake in the bank, has made a nominal profit of £900 million after selling its final shares. Lloyds’ troubles began after its 2008 takeover of HBOS – a deal which brought billions of pounds of bad debt onto its balance sheet.
Airline results in 2017 have proven to be something of a moveable feast. Budget airline Easyjet nosedived to its worst first-half loss in six years, affected by the weak pound and the later timing of Easter this year.
While the possibility of Bugs in the Oval Office has recently been a bit of a concern for residents of the White House, those who live at Number One Observatory Circle (the official residence of the US vice president), are a little less worried about having a bunny in their midst.
Mike Pence’s family’s pet rabbit, Marlon Bundo, has acquired quite a following on Instagram. Marlon, aka BOTUS (Bunny of the United States), recently made headlines when he joined the vice-president’s wife to address a group of military families. Mrs Pence joked with the children that Marlon was the first rabbit to fly on the second family’s official aircraft. Reports are as yet unconfirmed that the Pence family now plan to rename the plane ‘Hare Force Two’.
That’s all Folks!