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Donald Trump courts controversy with London property acquisition

Donald Trump courts controversy with London property acquisition

It is unclear why Donald Trump seems to go out of his way to cause controversy but the acquisition of a 51% stake in London so-called “Walkie Talkie” building has hit the headlines. The official name for the building is 20 Fenchurch Street although it is commonly known as London’s iconic “Walkie Talkie” building. So, what is so controversial about Donald Trump’s 51% stake in this iconic building?

Trump Tower

As quickly as the deal was announced there were pictures on social media showing a notice above the entrance of the “Walkie Talkie” building defining it as “Trump Tower”. It is rather ironic that he has already renamed the building, at least in his own mind, despite the fact he only owns 51% of the building. How do the minority shareholders feel about the controversy and images splashed right across social media? Continue reading “Donald Trump courts controversy with London property acquisition”

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Rising subprime auto defaults causing concern

Trade war looms in automobile industry

While the subprime market for automobiles is nowhere near the size of that for mortgages, which eventually brought down the US economy in 2008, it is a sizeable market. There are growing concerns that an increase in auto defaults amongst subprime lenders could stunt economic growth in the short to medium term. While not necessarily a market which will bring down the US economy, subprime auto defaults are now at their highest since 2007.

What does this mean?

A recent report by the New York Federal Reserve suggested that there are 6 million Americans who are at least one payment behind with their car instalments. There are serious concerns that this figure will only rise in the short to medium term. When you also bear in mind that used-car prices, according to the National Automobile Dealers Association, have fallen by 8% year-on-year, this is a situation which does need monitoring. Continue reading “Rising subprime auto defaults causing concern”

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Will technology IPOs hold back for now?

Stock markets

To say that the recent Snapchat IPO was a success is something of an understatement. Even though the company was forced to reduce its issue price to $17 the shares very quickly rallied well above $20. While the shares hit a high of $29.44 they have since consolidated just above the $22 mark. This still gives the company a valuation in excess of $20 billion even though it is non-profitable and unlikely to be so any time soon. So, will the ongoing market correction force technology IPOs to hold back for now?

Investor sentiment

On the whole there is certainly an appetite for technology IPOs although just recently the US stock market has come off an all-time high amid concerns about political pressure building against Donald Trump. He has promised for some time to reform the US medical care system in light of changes made by previous President Obama. Despite the fact that he holds a majority in both political houses he was unable to force through his suggested changes and withdrew the bill. This was a shock to investors and gave the market a reality check, hence a consolidation period. Continue reading “Will technology IPOs hold back for now?”

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Active fund managers making a return over passive investments

Paradise Papers open a can of worms for Donald Trump

Over the last few years there has been talk of passive investment funds taking money from their active investment fund counterparts. The suggestion was that markets were doing well and rather than risk the often volatile performance of active fund managers many were happy to go with the main indices. This seemed to have worked for many people but just recently there has been a shift in the risk/reward make up of active fund managers. So, why are active fund managers making a return over their passive counterparts?

Big bet on cyclicals

We all know that the US markets have retreated slightly on the back of concerns that Donald Trump may find it more difficult than initially thought to push through his more radical policies. There were concerns that this was the start of a significant correction but stock-picking fund managers in the US seemingly believe otherwise. It appears that many are doubling down on their bets that the economy is still in an upward cycle and will bounce back sooner rather than later. Continue reading “Active fund managers making a return over passive investments”

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How does European economic uncertainty impact the US economy?

Do tax havens impact stock markets?

Today is a monumental day in the history of the European Union and the UK with the triggering of Article 50. While nobody quite knows what this will mean for the UK and the European Union in the short, medium and longer term, it is a major shift away from the trend of recent years. The US and the European Union have always had a very shaky relationship and this is unlikely to get any better as the UK moves to trade directly with overseas partners.

We have already seen the UK government approaching their US counterparts about a direct trade deal although it is unclear at this moment in time how long this would take to conclude. However, trade deals with the EU take significantly longer as shown by the Canadian deal which has taken nearly a decade to conclude. Continue reading “How does European economic uncertainty impact the US economy?”

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Are the billionaires of today different from the David Rockefellers of yesteryear?

The pros and cons of low liquidity stocks

David Rockefeller, the world’s oldest billionaire, died last Monday at the age of 101 with a wealth of $3.3 billion behind him. While officially the 604th richest person in the world according to the Forbes list, his family have given away literally billions of dollars over the years since moving to the USA in 1720. He may be the last remaining grandchild of the great John D Rockefeller senior but the Rockefeller legacy will live on. This does prompt the question, are the billionaires of today different from the Rockefellers of yesteryear?

A different world today

You will need to look at the flotation of SnapChat on the US markets, with a $20 billion market capitalisation, to realise the markets we work in today are very different. While it took decades for the Rockefellers to develop their billions, the founders of SnapChat have done this in a fraction of that time. Even if you look at somebody like Bill Gates, the richest man in the world, it took him decades to build up his wealth as he nurtured and expanded Microsoft. Continue reading “Are the billionaires of today different from the David Rockefellers of yesteryear?”

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Anti-Trump analysts come out of the woodwork

Are markets concerned about the US/Chinese trade war?

As the Dow Jones looks to recover from an eight-day slump it seems that all of the anti-Trump analysts are coming out of the woodwork. Many of them were forced to take a backseat as the US stock market went from strength to strength when Donald Trump took up the role as president of the USA. Even before he took office the doom and gloom merchants were talking down markets, speculating on how long he would stay in the White House and whether he would be able to push through his more controversial policies. Initially investors ignored the downbeat comments and the US stock market went on a bull market run the likes of which we have not seen for some time.

“I told you so”

It will be interesting to see how the US markets react in the short to medium term especially when you bear in mind the difficulties that Donald Trump has had trying to push through his medical care reforms. Even though he has majorities in both US political chambers he was not able to gain enough support to push through his initial bill. This prompted concerns that Donald Trump’s key tax reforms and additional investment in infrastructure may also struggle to be put into practice. Continue reading “Anti-Trump analysts come out of the woodwork”

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Uber’s confidence in autonomous driving technology

Uber London licence

Uber has taken the world by storm with its innovative groundbreaking transportation service. This is a company which literally came from nowhere to reinvent the taxi industry and while it is not all been plain sailing, the company now has a worldwide presence. Last week saw yet another hiccup in the development of Uber with news that one of the company’s self-driving vehicles had been involved in an accident. The three self-driving car pilot programs were suspended on Friday but they were “back on the road” on Monday.

So what happened?

On Friday one of the company’s self-driving vehicles in Tempe was involved in an accident in which the car flipped over onto its side. There were obvious concerns that the technology had malfunctioned, self-driving vehicles were not safe and this could be the end of the road for Uber’s pilot program. However, in order to clarify the situation the company has released the police report which confirms that a human driven vehicle failed to stop and caused the crash with the Uber car although thankfully there were no injuries. Continue reading “Uber’s confidence in autonomous driving technology”

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Beware the change in sentiment affecting share prices

How many more IPOs will emerge?

We have been following “hot shares” on the forum for some time now and during the so-called “Trump rally” there have been quite a few to choose from. This feelgood factor has increased investor appetite for risk which has assisted many of these “hot shares” and pushed prices to 52-week highs. It is all good and well following momentum but you need to make sure that you are out of the shares when momentum and sentiment start to change. There are signs that the “Trump rally” could be running out of steam although nothing is ever certain in the world of Donald Trump!

You can trade on sentiment

Those with experience of trading stock markets will be well aware you can trade on sentiment without the underlying prospects for a company really changing. The degree of influence that sentiment can have on the share price will vary but even if it is 10% either way that is a potential 20% swing which is a trader’s dream. However, as we touched on above, those who have been trading on the back of investor optimism will need to think again if sentiment is truly changing. Continue reading “Beware the change in sentiment affecting share prices”

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10 million UK jobs at risk from robot replacements

Musk and Zuckerberg clash over artificial intelligence

A report by PricewaterhouseCoopers has cast a very interesting but very alarming light on the development of artificial intelligence and robots. The consultancy firm believes that potentially 30% of the UK workforce could be at risk of being replaced by a robot in the next 15 years. This equates to a staggering 10 million jobs with the wholesale and retail sectors set to be at highest risk. We published an article recently covering Bill Gates and his suggestion that robots were a major challenge going forward. Is Bill Gates right and are 10 million UK jobs at risk within 15 years?

Technology

There is no doubt that the number of companies and amount of money being invested into artificial intelligence has grown exponentially over the last decade. Often seen by the general public as a high-tech pie in the sky subject, artificial intelligence is one of the fastest-growing industries in the world. When you think about it, we already have an array of robots on production lines which have effectively replaced human beings. Many testing instruments today are robotic and again they have replaced a good old-fashioned worker. So, while it may be easier to ignore the onset of artificial intelligence, this is a ground breaking technology which is not going away. Continue reading “10 million UK jobs at risk from robot replacements”