No, not the latest dance craze to clog up the internet, but rather the term some are employing to describe the effects of his election as US president on equity markets. While the trend seemed to wane slightly at the beginning of the week (investors were discouraged by the protectionist overtones of his “America First” inauguration speech), it returned with full force after Mr Trump cleared the way for two controversial oil pipelines. The approval of the Dakota Access and Keystone XL projects boosted the share prices of oil producers, as the pipelines will provide a quicker route for oil to reach refiners on the Gulf Coast.
In fact, it was a strong week for reduplicative rhymes – even the symbolic barometer of the US equity market, the Dow Jones Industrial Average, got one of its own when it reached a new high. After flirting with the milestone back in December, the index finally broke the barrier on Wednesday, allowing the financial press to make liberal use of the phrase “Dow 20 Thou”. The Dow’s broader cousin, the S&P 500, also reached a new high, finishing up 1.1% for the week to close on Thursday.
May visits: takes quaich
UK Prime Minister Theresa May attempted to build on the ‘special relationship’ between the UK and US by being the first world leader to visit Mr Trump in the White House. She brought him the gift of a quaich, a two-handled cup that is a traditional Scottish symbol of friendship and is sometimes used in marriage ceremonies.
Top of Mrs May’s agenda for the trip will be talks about the possibility of a free-trade deal between the UK and the US. While such an agreement would be perceived as a coup for a post-Brexit UK, formal negotiations on the subject are unable to start until Article 50 is triggered, signalling the ‘beginning of the end’ of the UK’s membership of the European Union (EU). Separately, the Supreme Court (the UK’s highest) has ruled that Parliament must give its approval before the UK starts official discussions with the remaining members of the EU about life after Brexit.
UK gross domestic product figures for the fourth quarter came in better than expected, with growth of 0.6% recorded over the October to December period. The result, which was widely viewed as a sign of the UK economy’s resilience in the face of Brexit, was attributed to strong consumer spending. UK equity markets declined over the week, with the FTSE All-Share index down 0.4% at yesterday’s close.
In company news, earnings season got underway with a mixed bag of results for UK stocks. Shares in telecoms giant BT fell sharply after it issued a profit warning following the emergence of accounting irregularities at its Italian operation. Consumer conglomerate Unilever said fourth-quarter sales were up, but predicted a slow start to 2017 due to difficult market conditions. In the US, 32% of the companies in the S&P 500 had made their reports by Thursday, with 68% of those beating analysts’ expectations, according to Thomson Reuters.
Rooster booster?
Not a reference to the Champion Hurdle-winning racehorse, but rather to the upcoming Chinese New Year. Chinese bourses are closed for New Year’s Eve today, but were up in local currency terms at yesterday’s close. Early in the week, the People’s Bank of China injected 245.5 billion renminbi into the domestic banking system in a bid to meet heavy cash demand for the holiday, when banknotes are traditionally given as gifts.
And finally…
Been stuck in any traffic jams this week? If so, you might have some sympathy for drivers in China’s Chongqing province, who found themselves in tailbacks caused by a rather unusual obstacle – a Bactrian camel. Apparently, the animal’s disgruntled owner took the hump with staff at a tollbooth over the cost of taking it through and abandoned it there to go and have a cup of tea in a nearby (within spitting distance?) restaurant. But before the waiter could ask if he wanted one lump or two, local police caught up with him. A stern talking to, an order to remove the camel and a fine meant that he got his just deserts.
Editorial image credit: Photo by Christopher Furlong/Getty Images
