In what was a fairly uneventful week, US trade deals were again in the spotlight, powering US equities to new highs. European markets were little changed. UK stocks edged lower on weak economic data but renewed optimism over Brexit negotiations lifted the British pound to over US$1.30.
UK payday lender Wonga once claimed to be a good guy, on a mission to disrupt the incumbent banks as it sought to serve customers better.
Since then, the firm has been battered by a series of scandals and, following a clampdown from regulators, some of Wonga’s beleaguered borrowers are now getting their own back. As they beat down Wonga’s door for compensation payments, the surge in claims has left Wonga buckling. Despite the company’s efforts to recover its reputation, and a £10 million cash injection from investors, the firm has collapsed into administration. Yet, there seem to be few expressions of sorrow at Wonga’s downfall.
UK equities had a somewhat lacklustre week, in the absence of any ground-breaking newsflow. The FTSE 100 Index was down 0.9% by Thursday’s close.
Listeners tuned in to radio station France Inter were no doubt surprised to hear the dramatic live resignation of France’s environment minister Nicolas Hulot. “Are you serious?” responded the interviewer. Even more astounded, one imagines, was Mr Macron, whom Mr Hulot had not informed earlier on grounds that the French president would try and persuade him to stay on.
Frustrated and weary of making single-handed and largely futile efforts to ‘green-up’ French economic policy and safeguard the environment, Mr Hulot reluctantly decided to ‘jeter l’éponge’ and quit.
Described by some as France’s answer to Sir David Attenborough, Mr Hulot is a hugely popular eco-warrior. He will be sorely missed by Mr Macron, whose own popularity ratings have nose-dived since his election last year.
European stocks fell slightly over the period, with the FTSE World Europe ex UK Index down 0.2% by Thursday’s close.
Rocks and hard places
The US and Mexico finally signed a revised free trade agreement in what President Trump hailed as a “really good deal” for both parties. Now, Canada must decide – and soon – whether it will join the revised three-way agreement. Mr Trump has issued an ultimatum – sign by Friday or face additional tariffs on Canadian auto exports.
Never a nation to bow to threats, Canadians are standing firm, with Prime Minister Justin Trudeau insisting they will sign only if the deal is “good for Canada and middle-class Canadians”.
Both sides know that tariffs on Canadian autos goods would also hurt the American auto sector, which relies on parts manufactured in Canada. However, the economic blow to Canada would be extreme at a time when it is already locked in a trade battle over Mr Trump’s aluminium and steel tariffs. Estimates suggest a 25% levy on Canadian auto exports would jeopardise one-fifth of jobs in the Canadian auto dealership industry.
As they scrutinise the terms of the revamped trade bargain being offered, Canadian negotiators are likely trying to fathom whether the US president would carry out his threat, or if he’s bluffing. But past experience of Mr Trump’s gun-to-the-head tactics suggests he’s ready to fire first, negotiate later.
US equity investors were certainly heartened by the US/Mexico trade deal. The S&P 500 Index hit a fresh record high this week, before eventually closing at 2,901.20, up 0.6% over the first four days of the week.
The buzz fuzz had to be called in after 20,000 bees swarmed a hot-dog stand in New York’s Times Square. Without ado, a posse of NYPD officers arrived to find a 15-square-foot clump of bees loitering at the scene. Clad in full protective beekeeper’s clothing, intrepid officer Michael Lauriano gingerly stepped forward and arrested the bees, using a specially adapted vacuum cleaner. He later assured journalists he was specially trained to deal with bee-related incidents.
Once safely locked up in a hive box, the runaway bees were escorted to a police van, to be detained at an apiary on Long Island. However, the bees are unlikely to face charges for affray and disorder – like many New Yorkers, they were just trying to escape the sweltering heat and overcrowded conditions.