Hi Guys,
Its FO’s perspective here! While you may know me for the articles I write, I’ve decided to branch out into the newsletter world. I wanted to make understanding politics and finance simple and easy - so I hope this Newsletter does the trick! Thank you all for signing up and feel free to leave any reviews or suggestions for the Newsletter!
Stock Market review
US
It was a slightly poor week for the US stock market with 2/3 major indexes incurring weekly losses. This is can be attributed to the rising covid cases across the country as well as the treasury’s plan to allow some emergency lending programs - which have supported the bond market throughout the crisis - to end.
S&P 500: Down 0.8%
Dow: Down 0.7%
Nasdaq: Up 0.22%
Want to know what each index are? You can find out here
Europe
European stocks ended higher on Friday, clocking its third straight week of gains as a jump in commodity-linked stocks has helped to counter worries about rising coronavirus cases and an impasse over new U.S. stimulus.
FTSE 100: Up 0.55%
DAX: Up 0.46%
Stoxx 600: Up 1.15%
Finance
Dow Jones jumped 500 points on Monday following news of Moderna vaccine
Why should I care?
The jump was attributed to stocks which would benefit from the revival of the economy such as Tourism and Travel stocks. This also continues the trend of a ‘rotation’ from tech stocks - which have flourished during COVID - to value stocks and cyclical stocks.
Asian leaders have signed the Regional Comprehensive Economic Partnership (RCEP) - creating the largest Trade pact on the planet.
Why is this important?
The trade deal which has been a decade in the making includes the 10 members of ASEAN, plus China, Japan, South Korea, Australia and New Zealand. The new free trade zone will account for a third of the world's population and 29% of global GDP. The trade pact also highlights China’s increasing influence within the region as well as the growing regionalism within the world with a focus on trading in regions rather than internationally.
More than a third of hospitality firms say they have little or no confidence of surviving the next three months, according to (ONS)
American Companies have racked up 1.4 trillion in debt - Find out more here
Politics
President-elect Joe Biden will re-enter the U.S. into the Paris Climate Agreement, the global pact forged five years ago among nearly 200 nations to avoid the worst impacts of climate change.
Why is this important?
After China, USA is the second-largest emitter of greenhouse gases and thus is seen as key in the global effort to reduce the effects of climate change. So the USA’s rejoining will be key in attaining the goal of limiting climate change. America’s rejoining is also important as it highlights a move to repairing their relationship with Europe which was weakened under Trump who took a more isolationist approach and withdrew from the Paris agreement.
Keir Starmer has unilaterally decided to not restore the whip to Jeremy Corbyn despite his reinstatement into labour party as a member. Corbyn’s lawyers have written to Labour calling for his suspension as one of the party's MPs to be lifted.
Why is this important?
The issue over Jeremy Corbyn’s reinstatement into the party is emblematic of the current war within the Labour party. A large part of the party (far left?) still support Corbyn, while those to the right of the party are in favour of Starmer. The decision to not restore the whip has only contributed to the widening division within the Labour party and dented his Starmer’s hope to amend relations between the two sides of the currently divided labour party. If Labour fails to reconcile the labour party, it will continue to fail to be a viable alternative to the conservative parties.
Boris Johnson's senior adviser Dominic Cummings is expected to leave his position by the end of the year after tensions between him and the PM.
Why is this important?
This is a crucial moment in the power dynamics in No.10 as many has seen Cummings as essentially the leader behind the scenes due to his strong influence over Boris Johnson. Also, many MPs felt their access to the PM was cut off by Cummings and a gap between the party and No.10 was growing. Thus many see Cummings’ removal from No.10 as a chance to ‘reset’ the government.
EU officials think the deal is 95% done, wide gaps remain on 3 key issues
A draft report has found Home Secretary Priti Patel found guilty of bullying after inquiry
What I’m reading
I am currently reading Outliers which is a book which looks at extraordinary people and why some people achieve so much more than others. It’s going well so far and I hope to give you a review of it on my Instagram page
This week’s book recommendation is Why Nations fail? The book looks at the current economic disparities across the world and even between neighbouring countries and explains why it so. By taking us through history, the book explains why in fact Institutions (Democratic and economic) are the key factor behind wealth and living disparities. You can buy the book here
Podcasts
In the latest episode of the Career insight series on my Podcast, We delved into the Technology sector, where I welcomed Tobi Dada - an incoming JP Morgan software engineer - on to the Podcast. We talked about why coding isn’t needed to enter the tech sector, skills needed for the industry and the future of tech in Banking plus more!
In this week’s recommended Podcast episode, I’ve chosen the FT News daily briefing - they’re short, sharp and gives you the lowdown of the major news in the world.
Stat of the Week
$258 Trillion - That’s the total amount of Global debt and it represents a whopping 331% of Global GDP. You can read up on why it’s an issue here
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