The FTSE And The Pound Suffer
The FTSE 100 has suffered a fall of over 1.6% in the last few days and the pound hitting $1.22 suggests cause for concern for the UK.
Editor’s Remarks: Official data on China released yesterday shows that Chinese exports fell 10% year on year last month, which naturally sparked global concerns. Miners in the UK were hit hard with BHP Billiton and Rio Tinto falling 4.3% on the back of the news. Tesco also added to the losses, declining over 2% due to its post Brexit spat with Unilever over ‘Marmitegate’, wiping £500m off the retailer’s market cap. It will be interesting to see how further issues resulting from Brexit will cause other UK based firms to suffer pricing pressures, due to uncertainty hurting the pound, causing goods to become more expensive.
What to watch: Tesco, BHP Billiton, Rio Tinto, FTSE 100, GBP/USD
The Indian Startup Dream May Be Over
Startup funding in India plummeted to $583m in Q2 from its recent peak of nearly $3bn in late 2015.
Editor’s Remarks: This may come as a surprise to some given that the Indian sector attracted more than $8bn last year. The downward trend has paradoxically occurred despite positive conditions with the wider Indian economy booming, and inflation being low. Some have said that the Indian tech sector is experiencing a similar, yet classic bubble to the one that hit Silicon Valley in the dot com crash. With a 1.3 billion strong population and a surplus of skilled IT workers, Indian startups proved irresistible to many investors. Some will pivot, others may go out of business, but this will prove a testing time for the strongest.
What to watch: Infosys, Narendra Modi, Freshdesk, Myntra
Tesla’s Top Spot Above Mercedes And BMW
Tesla superseded other luxury sedans like Mercedes and BMW to take the top spot.
Editor’s Remarks: Tesla Model S sold 9156 vehicles in Q3 2016, almost double that of its nearest competitor, the Mercedes S Class. The markets have certainly bought into Elon Musk’s vision and Tesla seems to be innovating at a faster pace than its larger competitors, with features ranging from the “insane mode” for rapid acceleration to autopilot. Tesla continues to be in the lead with autonomous vehicles, well beyond the likes of Uber and Ford. But the company still has a long way to go in its target of producing 500k cars by 2018.
What to watch: Daimler, BMW, Tesla, Ford, Uber
Scotland Fights Back At Brexit
Nicola Sturgeon demanded additional powers for Scotland so it can remain in the EU single market.
Editor’s Remarks: Sturgeon’s decision to demand a Scottish referendum would depend on “doing what is best for the Scottish people.” She wants to distance Scotland from Britain when it comes to immigration and international relations, especially given Theresa May’s new breed on Conservatism that left many wondering whether the UK’s Prime Minister had been secretly a Brexiteer all along. In the EU referendum, the majority of Scots voted to stay in the bloc, after last year’s independence vote tilted in favour of staying in the UK. While Sturgeon’s actions do not necessarily mean a vote will take place, if it does this might be the beginning of the end for the UK, as Ireland has already also signalled it would prefer staying in the EU to remaining part of the UK.
What to watch: FTSE 100, SNP, Theresa May, Conservative Party, Brexit Negotiations
US Employment Benefits At Four-Decade Low
US Jobless claims filings stood at 246,000 in the period ended October 8th, the lowest level since 1973.
Editor’s Remarks: With filings beneath the 300,000 mark for the 84th consecutive week, things seem robust in the US labour market. As employers continue to remain reluctant to lay off workers, and openings remain relatively high, there may be potential for wages to creep up due to simple supply and demand. However it must be noted that there is still some slack within the US economy. The Fed will be watching this closely as an indicator to potentially consider raising interest before the end of the year.
What to watch: US Jobless Claims, US NFP, S&P 500, Fed Rate Decision