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Aug 09, 2019

The week in investor relations: A week of market turmoil

This week’s IR-related stories from around the web

It was a week dominated by market turmoil. The week began with a market rout. You know it was significant because major players in the market system consistently referred to it as a rout. Big tech companies lost $162 bn in value in Monday’s ‘market rout’, led by a dramatic fall in Apple, reported CNBC.

And Lael Brainard, the Federal Reserve’s board governor, said the Fed was monitoring the Monday market rout as it assessed how renewed trade tensions between the US and China might impact the economy and the monetary policy approach, reported Reuters.

On the rising tensions of a trade war between the US and China, The New York Times concluded it had entered a ‘more dangerous phase’ on Monday, with Beijing sanctioning its currency to weaken, resulting in President Donald Trump’s treasury department calling China a ‘currency manipulator’.

The stepping up of the trade war rhetoric had an impact on markets across the Asia-Pacific region on Tuesday, after they were shaken for a second day, reported The Sydney Morning Herald.

By the end of Tuesday however, CNN was reporting that the Dow and the overall US stock market had rebounded, driven by optimism that the currency tensions between the US and China would alleviate.

By Wednesday, US stocks were dropping once again, albeit not on the same levels as earlier in the week – this time on growing economic gloom, reported the Financial Times.

Then later on Wednesday, the S&P 500 did bounce back, but the reversals were not all good, reported Bloomberg.

In an attempt to put a positive outlook on Brexit, UK foreign secretary Dominic Raab said Trump had what he described as a ‘huge appetite’ for a post-Brexit free-trade deal with Britain, according to the Evening Standard.

On Thursday Bloomberg warned that ‘fearful’ investors were reluctant to give the ‘all clear’ on US stocks, though the S&P 500 did rally more than 1 percent.

On a similar theme, investors pulled tens of billions of dollars from equities and risky corporate debt over the past week due to the turmoil in the markets, reported the FT.

But the Los Angeles Times offered positive news, reporting that tech stocks boosted Wall Street shares on Thursday, driving the S&P 500 to its best day in more than two months and removing its losses for the week.

Nevertheless, it was soon back to the bad news: the FT reported that the UK economy shrank for the first time in seven years based on Brexit uncertainties and weakening economic growth.

On an individual share company level, Thursday saw shares in London-listed litigation financier Burford Capital bounce back after an attack from Muddy Waters, the American short-seller, caused a near 50 percent fall in Burford’s share price, reported The Times.

Uber shares also fell around 6 percent after the ride-hailing company reported a $5.24 bn loss in the second quarter, reported Sky News.

Looking at the Uber balance sheet in detail, The Daily Telegraph stated that Uber’s loss is far from its biggest problem.

British bookmaker William Hill proved not to be a safe bet, reporting a loss of £64 mn ($77 mn) in the first half of the year, though shares in the company jumped 5 percent, as the results were not as bad as expected, reported The Guardian.

And by the end of the week, European stocks were trading at a lower level early Friday as Italy’s coalition government fell apart, reported CNBC.

Stocks in China also fell Friday, overturning earlier gains. As a result, China stocks posted their biggest weekly fall since early May, noted Reuters.

In the US, stock futures also fell on Friday, as investors got ready for another wild day, reported CNBC, with persistent trade war fears becoming a specter over the markets, finishing off a rather tumultuous week