March 1st Mid Week Roundup – What’s Happened and What’s Happening?

by | Mar 1, 2017

What’s Happened So Far This Week?

President Trump spoke to congress on Tuesday evening. He followed similar themes to the tone of his inauguration address, calling for Democrats and Republicans to come together to fix major issues facing the country including healthcare, inner city crime and the massive trade deficit. Skeptics believe he outlined an economic plan which doesn’t represent the interests of the working classes who he purports to represent. He outlined a $1 trillion investment in infrastructure, and hailed ‘a new chapter in American Greatness’. The speech, despite conflicts, eased market tensions, as investors. The FTSE 100 in London opened within spitting distance of a record closing high it set in January.

Markit PMI numbers for countries in the Eurozone are hitting highs, according to the latest data on Wednesday. PMI data for the Netherlands and Germany hit 70 and 69 month-highs respectively, and even Greece hit a 2 month high, despite ongoing tensions with the IMF.

Trump also reaffirmed his commitment to fix America’s infrastructure on Monday, speaking at the National Governors association meeting. Be stressed the need for large-scale investment to mend the country’s highways, tunnels, airports and other structures. Alongside this, he maintained that the Republican administration will repeal and replace ‘Obamacare’ with a more robust healthcare system for the American public, as well as returning greater powers to state Governors, law enforcement and other entities. On top of this he announced that his budget will be revealed next month, which will include a substantial increase in military spending, which is likely to cause some controversy within congress due to the sheer size of the proposed changes (to the tune of $54 billion). He said that the Government must learn to ‘tighten it’s belt’, which will certainly be needed elsewhere with such a boost to military spending.

Blue chip companies have been on a bit of a bender throughout February. Apparently, President Trump isn’t severely damaging the nerves of investors. At least not for the time being, though speculation is mounting about what comes next once the administration tries to put his plans into action. Will congress give the go ahead easily?

The long awaited and anticipated merger of the London Stock Exchange Group and Deutsche Börse is all but dead, after LSE refused demands from European Union authorities who wanted the British exchange to sell it’s 60% stake in an Italian fixed-income trading venue named MTS. On the German side, representatives thought that the UK wanted to get out of the deal anyway, and that the request from the EU was just an excuse to pull the trigger regardless.

Warren Buffett is bullish on Apple. The legendary investor announced that Berkshire Hathaway’s stake is over a whopping $18 Billion dollars. He now says that he wont be buying more, because Apple’s share price is now too high. Berkshire Hathaway is one of the company’s biggest shareholders, besides other major financial institutions like Blackrock.

Analysts from Morgan Stanley think the pound will return to pre-Brexit levels by the end of 2018. They say Sterling remains the most undervalued major currency. However, there is plenty of threats still at play. Firstly, Britain still has to negotiate it’s terms of departure and the deal it will be left with after leaving the EU. If the negotiations become heated and more difficult than expected, this might throw a spanner in the works and create more uncertainty, which is exactly what businesses don’t want – many firms have had barely any peace since 52% of the voters chose a different path for Britain. There’s also further political headaches facing the EU in the form of elections in the Netherlands and France, where Gert Wilders and Marine La Pen are garnering huge domestic favour. If they win, they will likely withdraw their respective countries from the single currency entirely and hold referendums on their membership in the bloc. How this potential upset could affect the EU’s feelings towards the UK is yet to be seen.

What’s Coming Up This Week?

Wednesday 1/3/17:

We get company results from Admiral Group PLC, ITV, Carillion, Dollar Tree and many more. Manufacturing data from China, the Eurozone and the UK. Plus oil inventories from the US so the crude oil market will be in focus.

Thursday 2/3/17:

Company results from Merlin Entertainment, Capita, Travis Perkins, Continental, Costco, Schroders, Cobham and more. Australias trade balance, Spain GDP and unemployment, EU unemployment rate and more.

Friday 3/3/17:

Company results from WPP, LSE Group, Staples and more. Japan CPI and unemployment figures, services PMI from China, services PMI from several EU countries including France, Germany and the UK, Italy’s Q4 GDP growth rate (which many will hope will provide good news after a slew of bad news concerning the countries banks and debt level over 2016/17).

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ALL RIGHTS RESERVED © INVSTR LTD. 2017

Risk Disclosure:

Invstr is a technology platform, not a registered broker-dealer or investment adviser. Invstr does not offer its own recommendations of any security or provide its own research to any user regarding any security transaction or order. Brokerage services, including fractional trading of US securities, are provided to Invstr users by DriveWealth LLC, a regulated member of FINRA/SIPC. DriveWealth may not establish investment accounts to residents of certain jurisdictions. For more information, including disclaimers, risk and transaction fees click here. Please note, investing involves risk and investments may lose value. Past performance does not guarantee future results.

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