This week: Europe battles the “beast from the east” while the U.S. deals with tariffs on steel and aluminum.
Snow blanketed the headlines as the aptly named “beast from the east” snowstorm bared its teeth and snarled up much of Europe. Trains and planes were cancelled, schools shut and the public urged to stay indoors and keep warm. In Rome, a city unaccustomed to harsh winters, fighting of sorts broke out at the Vatican, as priests joined in the fun and hurled snowballs.
Continental European stocks were less resilient than Italy’s clergymen, though, shedding nearly 1.5% in the four days to Thursday’s close. UK shares were down around 1%.
Skating on thin ice
Snow and ice were also plentiful – albeit more welcome - in Pyeongchang as the Winter Olympics drew to a close. Despite the chilly temperature, relations between the two Koreas continued to thaw over the course of the games, with leaders of North and South pledging closer ties. While some applauded, others felt uneasy. After all, not so long ago, the hermit state was lobbing ballistic missiles skywards. North Korea even extended the hand of friendship to the U.S., signaling a willingness to enter dialogue. However, the offer met with a frosty response from Donald Trump, who responded by slapping on additional punitive sanctions.
Cold climate for bricks and mortar
Two leading high street names went the way of Woolworths this week, as privately listed retailers Toys R Us and Maplin became the latest casualties of the relentless shift to online shopping. Having failed to find buyers, they collapsed into administration, putting over 5,000 jobs at risk. Their demise – and that of bricks-and-mortar businesses like Jaeger, Austin Reed and BHS – has largely been blamed on high fixed costs and a failure to make sufficient investment in digital platforms. Other retailers perceived to be similarly vulnerable slumped in sympathy, notably Mothercare, whose shares have now lost about 60% in the year to date.
A cautious debut
In his first speech since taking over from Janet Yellen as Federal Reserve (Fed) chief, Jerome Powell reiterated the U.S. central bank’s commitment to gradual rate rises. At the same time, clearly mindful of the probable stimulus effects of President Trump’s tax and government spending plans, Mr. Powell vowed to guard against overheating. Mr. Powell’s assertion that the U.S. economy had recently strengthened raised expectations for a more rapid path of interest-rate hikes in 2018 than had previously been anticipated. U.S. 10-year Treasury yields rose after the speech, but ended the week at 2.80%. Meanwhile, U.S. equities were hit hard at the end of the week after Trump announced heavy tariffs on steel and aluminum exports. These sparked fears of a trade war with the European Union and Japan.
Leaving the past behind
Shares in beleaguered UK doorstep-lender Provident Financial leapt 70% higher on Tuesday, after the company unveiled a £331 (US$ 456) million cash call aimed at drawing a line under past woes and making a fresh start. The money raised will be used to pay fines related to selling unsuitable products and to shore up Provident’s frail balance sheet. The company endured a calamitous year in 2017, when efforts to revamp its collection model proved disastrous and it was the subject of two regulatory investigations. Soothed by the knowledge that things might have been worse and the cash-call much bigger, investors eagerly toasted the company’s brighter future under the leadership of newly-appointed CEO Malcolm Le May.
We’ve all heard of thieves being caught red-handed, but what about red-faced? A brazen burglar from Hazle Township, Pennsylvania, suffered just such an indignity this week, when he was spotted standing outside a house in the area, covered in tomato sauce, by the property’s owner when he returned from work. On discovering that a pot of meatballs was missing from his garage, the wrathful resident called in the State Police. After he was able to ketchup with the suspect, one Leahman GR Potter, the arresting officer didn’t mince his words: Potter has been charged with burglary, trespass and theft.
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Editorial image credit: Simone Cecchetti - Corbis / Getty Images