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Aug 23, 2019

The week in IR: Powell makes statement, Facebook’s Libra faces probe & NMC Health is short no more

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

Wall Street advanced for the third day on Monday, with investors focused on monetary policy ahead of the Federal Reserve’s annual economic conference later in the week and amid optimism on trade, reported the Financial Times.

In an interesting development, CNBC reported that hedge funds are discarding tech stocks, making it the most underweight sector, in favor of healthcare. The question is: is this is a good or bad thing?

In the Asia-Pacific region, Business Insider revealed that investors are pulling a massive amount – equating to billions dollars – out of Chinese stocks and warned that this situation is not going to stop anytime soon.

Within Europe, aside from Brexit and political uncertainty in Italy, there is another factor to worry about, with Germany likely to tip into recession, the country’s central bank warned, reported the FT.  

The Dow staged a mid-week rally just as – rather paradoxically – the bond market was, not for the first time, flashing a recession warning sign, reported CNN

US stocks eventually closed higher as big American retailers gave markets a boost, Fox Business reported. In Asia, however, markets proved a mixed bag, according to CNN, as major regional companies reported earnings.

But a very different – and extremely negative – slant came from the South China Morning Post on Thursday, which revealed that stocks on the Hang Seng Index face their worst slump since the 2008 global financial crisis. Then US stocks ticked nicely upwards, ahead of the big waiting game on what the Fed will do on rates, noted the FT.  

And according to CNBC, the US stocks making the biggest moves are an interesting mix: Pennsylvania-based Dick’s Sporting Goods, Minnesota food company Hormel, top eight-listed US retailer Target and furniture store Wayfair.

Facebook’s Libra digital currency has, inevitably, been given much publicity, which in turn has attracted the attention of regulators. It now faces a regulatory probe, resulting in some backers distancing themselves from the crypto-currency project, reported the FT.

The most shorted stock in the FTSE 100, NMC Health, rose 22 percent on Thursday, as the Abu Dhabi health firm became the target of Chinese interest, reported the FT.

Patrick Byrne, the outspoken chief executive of online retailer, quit the company on Thursday after a number of surprising and controversial public statements that knocked a fifth off the firm’s stock market value, reported the FT. Perhaps Byrne could run for the US presidency?

Japanese stocks rose on Friday, underpinned by the yen’s depreciation, Reuters revealed, with the Nikkei rising 0.4 percent – up 1.4 percent for the week.

Early Friday saw UK infrastructure company Eddie Stobart boot out chief executive Alex Laffey and suspend trading in its shares after a multi-million-pound accounting scandal within the group was revealed, reported City AM. The new CEO is Sébastien Desreumaux.

Also on Friday, stocks climbed along with US equity futures, as investors eagerly awaited Fed chair Jerome Powell’s speech, reported Bloomberg. Markets then became edgy as Powell said there was no rulebook on trade war and that he would do his best in the circumstances to maintain economic growth, without saying anything about rates. CNBC gave a good assessment of the many messages in Powell’s speech, though.

At least one person was deeply unhappy, however. US President Donald Trump came out swinging, stating in a tweet: ‘As usual, the Fed did NOTHING! It is incredible that they can ‘speak’ without knowing or asking what I am doing, which will be announced shortly’. Oh dear.

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