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Tensions are running high between North Korea and the U.S.

Week in review: Fury, fire and fear

This week: tensions mount between North Korea and the U.S.

Geopolitical tensions ratcheted up several notches this week as saber-rattling from North Korea brought threats of “fire and fury” from U.S. President Donald Trump.

On Monday, the UN Security Council imposed new sanctions on North Korea over the continued development of its nuclear weapons program. The measures, which were driven by the U.S. and approved by both Russia and China, are designed to cut North Korea’s export revenues by a third. Their announcement prompted a vow of “thousands-fold revenge” on the U.S. from Kim Jong-un’s regime.

In response, Trump warned Pyongyang that continued threats would be “met with fire and fury like the world has never seen.” The North Korean regime then announced that it intended to fire four of its Hwasong-12 missiles into the seas around the U.S.-held territory of Guam. Pyongyang spokesmen dismissed Trump’s threats of retaliation as “nonsense,” saying that they were “extremely getting on the nerves of the infuriated Hwasong artillerymen.”

Global stock markets reacted with alarm, and the FTSE 100 and the S&P 500 indexes were both down 1.6% by Thursday’s close. This was the biggest slide in the S&P 500 since May. European shares did worse, falling 1.7% in their weakest week for nine months. The VIX – which measures stock market volatility and is known as Wall Street’s “fear index” – spiked to its highest level since Trump’s election victory in November.

Coke fizzes as others fizzle out

One stock to buck the general downturn in the FTSE 100 this week was Coca-Cola HBC. The Swiss-headquartered, UK-listed Coke bottler reported increases in both sales and operating profit in the first half of the year. The company reported particular strength in emerging markets, with Eastern Europe showing a growing taste for the fizzy brown stuff.

Another stock to buck the sell-off was Randgold Resources, which gained on the announcement of a substantial gold discovery in Côte d’Ivoire. This boosted sentiment towards the Africa-focused mining company further, following a strong earnings report last week.

Snapping out of it?

Wall Street’s had quite a fling with technology this year. But after a first-half surge that took the valuations of the Nasdaq giants to eye-watering levels, the ardor for all things tech appears to be fading.

This week provided further evidence of cooling passion. Shares in the so-called FANG stocks – Facebook, Amazon, Netflix and Google (Alphabet) were all down over the week. Google attracted some unwelcome attention after a row over a memo attacking the company’s diversity policy – and the subsequent firing of the employee who wrote it. This came at a time when sentiment towards the shares had already been soured by last month’s disappointing earnings report.

But the highest-profile tech casualty was the NYSE-listed Snap Inc., which operates messaging service Snapchat. Its quarterly results fell significantly short of expectations. Snap has been coming under pressure from larger tech companies, which have been – ahem – snapping up many of the features that were previously unique to Snapchat. Its share price snapped back by 17% on the announcement.

Nor was the tech sell-off confined to the U.S. Shares in Chinese internet colossus Tencent slumped at the end of the week after the Cyberspace Administration of China announced an investigation into reports that Tencent, along with its internet peers Baidu and Weibo, had been distributing user-generated content including “violence, porn and rumors.”

And finally …

With War for the Planet of the Apes dominating the silver screen, it may come as some relief to learn that we still have the edge over our simian cousins in the game of rock, paper, scissors. Japanese scientists have discovered that while chimps can play the game, they struggle to cope with one of its core concepts.

In general, the apes display an aptitude akin to that of a four-year-old child. They have little problem in grasping that paper wraps rock and rock crushes scissors. But unused to cutting paper in their jungle abodes, chimpanzees are at a distinct disadvantage in understanding the threat that scissors pose.

It’s not all one-way traffic, though. While they struggle with scissors, chimps have a definite edge when it comes to arm-wrestling. Because they have fewer motor neurons to activate for each muscle fiber, chimps can activate many more fibers at once. That gives them four times the pulling power of a human.

But there is one question that science has yet to resolve. Who is better at Call of Duty?

Important Information

Foreign securities are more volatile, harder to price and less liquid than U.S. securities. They are subject to different accounting and regulatory standards, and political and economic risks. These risks are enhanced in emerging markets countries.

Companies mentioned are for illustrative purposes only and are not intended to be a recommendation to buy or sell any security.

Indexes are unmanaged and are included for illustrative purposes only. You cannot invest directly in an index.

Image credit: Newscom / Alamy Stock Photo

ID: US-110817-40663-1





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