Was it worth the wait? The week’s big event in the highflying tech sector was the unveiling of Apple’s new iPhone. And not just one iPhone, as it turned out, but three: the iPhone 8, the iPhone 8 Plus and – the main event – the iPhone X.
The new phone boasts an edge-to-edge screen, cordless charging and Face ID. This is supposed to allow you to unlock your phone with a glance. But the software fell flat on its face at Tuesday’s launch, when the demonstrator’s first phone failed to function. Investors seemed less than impressed; Apple’s shares were down 0.2% by Thursday’s close.
There was better news for Apple’s Nasdaq peer Netflix. On Thursday, the streaming-media provider announced that it was extending its partnership with Orange. The new deal will make Netflix’s content available to Orange subscribers in all 29 countries in which the French telecom firm operates. The market evidently approved: Netflix’s shares performed well over the week as investors showed a preference for Oranges over Apples.
Mixed fortunes – and missiles
Global markets produced mixed results. Europe was the strongest developed region; by Thursday’s close, the FTSE World Europe ex UK index up by 1.9%. With the S&P 500 up 1.4%, the US market was also in rude health. In contrast, the UK equity market declined. At the end of Thursday’s session, the FTSE 100 was down by 1.1%.
Most markets retreated on Friday morning after North Korea launched a second missile over Japan. This prompted missile drills from South Korea and further warnings from the US. Rex Tillerson, the US Secretary of State, said that “China and Russia must indicate their intolerance for these reckless missile launches by taking direct actions of their own”.
The latest missile launch followed the imposition of fresh sanctions on the ‘Hermit Kingdom’ by the United Nations Security Council at the start of the week. These sanctions include restricting oil imports, banning it from exporting textiles and ending new visas for North Koreans seeking to work abroad. To get Russia and China to agree to the measures, however, the limits on oil imports were watered down. Nevertheless, the sanctions are likely to have a major effect on the North Korean economy.
FTSE falters as sterling surges
The FTSE’s fall came as the Bank of England appeared to edge closer to raising interest rates. Although the Monetary Policy Committee voted 7-2 against increasing rates on Thursday, the minutes of the meeting showed that attitudes had hardened and that “monetary policy could need to be tightened by a somewhat greater extent over the forecast period than current market expectations”. After the publication of the minutes, Mark Carney, the central bank’s governor, said that the “balancing act is beginning to shift” and the possibility of a rate hike “has definitely increased”.
In response, sterling hit a one-year high against the US dollar. This had a negative effect on the FTSE 100, as a stronger pound reduces the earnings of index companies with operations abroad. Housing-related shares also sold off, as the prospect of higher interest rates could dent demand for homes.
There was better news for Next, which was the FTSE’s strongest performer over the week. Although the clothing retailer’s net profits fell by almost 10% in the first half of the year, it forecast better full-year profits as it expects inflationary pressures to abate.
And finally …
These are uncertain times for political leaders. In the US, the prospect of Donald Trump’s impeachment is much discussed. In Germany, Angela Merkel is about to face the electorate. And in the UK, Theresa May has lost her majority and with it, perhaps, her chance of another term of office.
So, with elections failing to produce stability, perhaps it’s time to consider an older means of establishing leadership: possession of Excalibur. If we take the Arthurian approach, then the rightful ruler of the Britons would appear to be Matilda Jones, aged seven.
While on holiday in Cornwall, Matilda pulled a four-foot sword from the depths of Dozmary Pool. According to local legend, Dozmary Pool is where King Arthur’s knights returned Excalibur as the king lay dying. Possession of the sword supposedly confers the right to rule Britain. So, assuming that Matilda’s sword is not a discarded film prop and is in fact a mythical blade forged on the Isle of Avalon that can slice through iron as easily as wood, she’s in charge.
Queen Matilda, anyone?