According to John Locke, the 17th century English philosopher: “Things of this world are in so constant a flux, that nothing remains long in the same state.” Of late, his sentiment has resonated both geopolitically and financially. First it – that is, the potential trade war between the US and China – was on, then it was off, then it was on again.
Donald Trump’s opening salvo, fired a couple of weeks ago, was 25% tariffs on the importation of certain Chinese goods to the US. China’s rejoinder was an announcement of its own border taxes on a variety of US products. The list ranges from agricultural commodities to aeroplanes. There followed some hopes of a ceasefire, as China’s ambassador to the US, Cui Tiankai, met with acting US Secretary of State, John Sullivan on Wednesday. These were quashed late on Thursday, however, as President Trump said China had “chosen to harm [US] farmers and manufacturers,” and ordered his government to consider an extra $100 billion in tariffs on imported Chinese goods.
Each of these moves caused considerable volatility in financial markets. In the US, Wall Street began the week and the second quarter of 2018 in ‘correctional’ territory – meaning that its main stock markets had all fallen more than 10% from their previous peak, which occurred back in January. On Tuesday, the prices of soyabean and corn futures both dropped 2.1% on the back of China’s retaliation. Hopes that talks might lead to the conflict ending less bloodily were reflected in a rally on the S&P 500 index: the market was up 0.83% for the week to Thursday’s close. In the UK, the FTSE 100 Index of large-cap stocks climbed 2.0%. The returns omit any response to the US President’s latest sally, however, which came after US trading hours.
Spotify tries for splash-free
Technology stocks also endured a bumpy ride. Increased public scrutiny in the aftermath of Facebook’s user data scandal, both towards social media companies and the wider sector, meant they started the week under pressure in Europe and the US. Tech went on to rally in line with other market sectors, however. Events such as Spotify’s ‘non’-IPO (initial public offering) also drew attention to the industry. Shares in the Swedish company, which is the world’s largest music streamer, ended their first trading session at $149, ahead of their reference price of $132. The ‘direct’ listing differed from normal IPOs in that it was not underwritten by any large banks. The company’s founder, Daniel Ek, said that the fanfare-free event meant the company’s focus is not “…on the initial splash”.
Residents of Livingston Parish, Louisiana, were treated to an unusual sight on Wednesday (or ‘hump’ day, if you will) – a camel who had desert-ed her usual enclosure on a quest to find her favourite snack. Bubbles, the dopey dromedary who stars each year in the town’s Nativity play, allegedly made four escapes over the course of the day in search of some graham crackers, a honey-flavoured treat that she sometimes receives from her owner’s neighbour. Given the ease of her repeated breakouts, we assume the gap in her enclosure is somewhat larger than the eye of a needle.