This week: Mark Zuckerberg faces questions from Congress.
The uses and abuses of “big data” were in focus this week, as Mark Zuckerberg was summoned to Capitol Hill to face two days of questions from U.S. Congressional committees.
In response to questions arising from the Cambridge Analytica scandal, Zuckerberg said that Facebook would be “investigating many apps, tens of thousands of apps” for suspicious activity. Some basics were established too. How does Facebook make money? “We sell ads.”
Zuckerberg said he would not be changing Facebook’s default settings to ensure greater privacy for its users, although he did accept that there might be a need for greater regulation. He came under pressure over data tracking outside Facebook sessions, however, with Congresswoman Kathy Castor telling him that “a devil’s bargain has been struck.” For many of the questions, the gist of his answer was “I’ll have my team get back to you.”
The grilling might have been grueling for Zuckerberg, but investors seemed satisfied with his performance. Shares in Facebook surged after the hearings.
Shooting up …
Facebook was just one of many S&P 500 Index components to enjoy a strong week. The US. .index was up 2.3% by Thursday’s close. This was despite a ratcheting up of geopolitical tensions, as a suspected chemical attack in Syria led to threats of military intervention from President Trump and warnings from Russia that U.S. missiles would be shot down by its forces. Trump dialed down his rhetoric later in the week, however, and share prices rose in response.
… and stepping down.
Trump also had difficulties closer to home. Paul Ryan, the Republican Speaker of the House of Representatives, announced that he would be stepping down at the end of his term. Many commentators have suggested that Ryan’s personal difficulties with Trump played a part in his decision, along with the chances of the Republicans losing their House majority in November’s mid-term elections.
It’s not clear to what extent (if any) online activity has been compromising our privacy, but it’s certainly been hurting the UK high street. According to the Local Data Company, almost 6,000 British shops closed down in 2017, leading to a net decline of 1,700 stores. One recent change in shoppers’ behavior has been a shift towards buying clothes online. That may suggest that “shopping as leisure” can’t be relied on to protect bricks-and-mortar stores from their online rivals.
But the week brought some good news for retailers too. Supermarket operator Tesco announced full-year pre-tax profits of £1.3 billion (US$1.9 billion), far above last year’s £145 million (US$207 million). This huge gulf was partially due to some one-off charges in 2016 and asset sales in 2017, but it still represents a resounding comeback for the company. Investors cheered the news: Tesco’s shares were up almost 14% over the week.
Meanwhile, clothing retailer Next defied the high-street gloom with a strong share-price performance. Sales at the company’s physical stores have under pressure, but its online offering has been doing well.
Overall, both the FTSE 100 and the FTSE All-Share indices were up 1.1% by Thursday’s close. European shares also performed well over the week. As the risk of U.S. strikes in Syria receded, the FTSE World Europe ex UK Index ended up 1.0% for the first four days of the week.
And finally …
The friggatriskaidekaphobic among you will have noticed that it’s Friday the 13th today.
What you may not know is that any month that starts on a Sunday will have a Friday the 13th – or that there’s at least one in each year. Or that Friday is sometimes known as Hangman’s Day. Or that it’s Tuesday the 13th that’s unlucky in Spain and Greece.
But how does all this affect the stock market?
Well, not much. According to Howard Silverblatt, a senior analyst for Dow Jones Indices, stocks have actually risen on more Fridays the 13th than they’ve fallen. Why? Well, for all the jitters caused by superstition, looking forward to the weekend seems to hold greater sway.
We hope you have a good one!
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