Further tariffs weigh on risk appetite

News late last night that the US will impose tariffs on a further $200B of imports from China has roiled the markets with the FTSE falling more than 1% to its lowest level of the week. The pound is little changed, and remains within Monday’s trading range after yesterday also saw an inside day.  

Trade concerns fail to recede

Worries that an escalating tit-for-tat trade war between the US and China refuse to go away with the latest move from Washington serving to ratchet up tensions once more. It’s been several months since this theme 1st appeared, and there is little sign of it ending anytime soon with both parties seemingly not willing to back down. With the China’s leading stocks in bear market territory it is clearly weighing on investor appetite in the far east and the US equivalents look vulnerable to some downside going forward given their recent strong run with the Nasdaq ending Tuesday not far from record territory before the latest measures were announced.

Facebook hit with fine for data breach

The UK’s privacy watchdog, the Information Commissioner’s office (ICO) have hit Facebook with a £500k fine for the data sharing scandal. The size of the fine is the largest permitted but it is dwarfed in significance by the £95m fine handed to the social media giant by the European Commission last year - which also fined Google £2.1B in 2017. The fine looks even more paltry when compared to the £3.6B profit the firm reported in the first quarter of the year and if truth be told serves as a reminder that regulators still have too little real power in controlling the actions of the large tech firms.

Sky dips as Fox announce takeover deal

There’s been some interesting move in the shares of Sky recently with a bidding war between 21st Century Fox and Comcast propelling the stock firmly higher. Shares opened markedly lower this morning however after Fox announced that they had agreed to pay £14 per share for Sky - almost 7% below Tuesday’s closing level of £14.99. The dip lower has been bought with the stock moving back close to yesterday’s close and the significant premium suggests that investors feel there could still be further developments to come. Fox had agreed to buy Sky for £10.75 back in December 2016, but the original takeover was delayed due to a regulatory anti- competition review which allowed Comcast to bid £12.50 in April. Fox have yet to receive UK government clearance for the planned takeover, with a decision expected on Friday and traders are clearly betting that there may still be further bids going forward.