However, thankfully one thing you can be sure of with Trump is that you can’t be sure of anything with Trump. After a calming weekend of measuring his hands, Donald seems to have softened his stance at the start of this week. Comments came from Teasury secretary Steven Mnuchin that “very productive conversations” between the two countries have made him “cautiously hopeful” that an agreement can be reached. So, the threat of a trade war has retreated somewhat and global stocks, led by the US, surged. However, Mr. Mnuchin also said that the US wasn’t bluffing or “afraid of a trade war”, a reminder that negotiations could easily go sour and markets would soon crash back down. Yet, some analysts believe the potential impact of the trade war on global stocks has already been overestimated in an overdone sell off.
Wednesday morning 28/03/2018
In another “WTF” moment, Monday’s resurrection was undone as the Wednesday morning episode of this soap opera featured massive global loses. Tech stocks fell spectacularly, big names like Facebook, Twitter and Alphabet (Google) were crushed as investors feared repercussions over the handling of user data. You may have heard about the recent scandal involving Facebook selling 50m of its user’s data, including contact details as well as interests and likes to a company called Cambridge Analytica. This company used the data to design targeted adverts for Trumps election campaign (all roads lead to Trump), all without consent. US congress have since launched an investigation to determine whether where Facebook “failed to protect user’s privacy”. A damming verdict may result in eye watering fines or make advertisers unwilling to use these sites, but most worryingly for investors is the potential for congress to tighten up data privacy regulation. Wednesday’s news that Facebook CEO Mark Zuckerberg will testify to congress was seen as a sign that Mark may be forced to bow down to these changes, sparking a tech rout. More stringent rules may restrict the ways tech companies can utilise data to generate revenue as well as making their business operations more cumbersome and expensive. As usual, the effect from the US markets trickled down into the rest of the world. Regulation change in the US would set a precedent across the globe, especially as companies that handle user data are likely to have an international user base.
And that’s where we are right now, in this new era of volatility who knows what is going to happen by the end of the week. We will try to keep you posted on StickPickers.co.uk and as always, in our simple and explanatory manner.