Turn on Javascript in your browser settings to better experience this site.

Don't show this message again

This site uses cookies. By continuing to browse the site you are agreeing to our use of cookies. Find out more

Week in review: what’s your emergency?

  • 22Feb 19
  • Craig Hoyda Senior Quantitative Analyst, Multi-Asset Investing

It can be tough accepting that we can’t always get what we want. But most of us would consider it just a fact of life. Not President Donald Trump, however. He followed up on last week’s threats by declaring a state of emergency at the U.S.-Mexico border. His preferred end-game? Securing funding to allow the construction of his “wall.” A rather creative and controversial means-to-an-end, some would say.

Mr Trump’s declaration caused widespread outrage. It also prompted much legal wrangling. Thus far, 16 US states, including California, have launched lawsuits to stop what critics are calling a “fake emergency.” Democrats in the U.S. House of Representatives have also filed a resolution to block Mr. Trump’s declaration.

Such emergency powers would enable the president to raid departmental and military coffers to get the billions of dollars he needs. His opponents argue that diverting funds and resources to the wall would not be in America’s economic interests.

These legal challenges won’t come as a surprise to the Mr. Trump. After all, he stated in his declaration that he fully expected to be sued.

Unperturbed, and as “the emergency” raged on, Mr. Trump jetted to Miami to play some golf. He also found the time to escalate the political row with Venezuelan President Nicolas Maduro.

Against this backdrop, the S&P 500 Index1 posted a virtually flat return for the week to the market close on Thursday, February 21. Markets had been anticipating the release of the minutes from January’s Federal Reserve (Fed) meeting on Wednesday. Remember the one when the Fed performed a startling U-turn? In the end, the minutes proved far less dramatic, reaffirming the Fed’s patient approach to interest rates. Cheaper money, anticipation of some form of trade agreement, and a range-bound U.S. dollar remain a powerful cocktail for markets.

Breaking free

As the March 29 Brexit deadline approaches, there were more headaches for UK Prime Minister Theresa May and Labour party leader Jeremy Corbyn. A breakaway faction of members of Parliament, including (thus far) eight Labour and three Conservative party ministers, formed The Independent Group. Weary of the culture and increasingly hardline policies of their former parties, these politicians didn’t appear to find breaking up all that difficult to do.

Breaking free

As the March 29 Brexit deadline approaches, there were more headaches for UK Prime Minister Theresa May and Labour party leader Jeremy Corbyn. A breakaway faction of members of Parliament, including (thus far) eight Labour and three Conservative party ministers, formed The Independent Group. Weary of the culture and increasingly hardline policies of their former parties, these politicians didn’t appear to find breaking up all that difficult to do.

Airing the banks’ dirty laundry

Europe’s banking sector was somewhat beleaguered. Danske Bank’s money-laundering scandal deepened following news that Estonian regulators have ordered the company to close its branch in Tallinn. Joining Denmark, France and the UK, the U.S. Securities and Exchange Commission (SEC) looks set to investigate the Danish lender. Swedbank is also now in the picture, as it faces allegations of more than US$4 billion of suspect transfers to Danske in the region. Elsewhere, UBS was fined €4.5 billion *about (US$5.1 billion) for illegally soliciting clients in France and laundering the proceeds of tax evasion.

Overall, the FTSE 100 Index2 was down 1% over the week as of the close of the market on Thursday, February 21. The FTSE World Europe ex-UK Index3 finished 0.6% higher.

And finally …

How do you fancy spending the night in a hotel dedicated to the mighty sausage? Gasthaus Böbel in Germany promises a stay with a difference. Appealing to confirmed carnivores, the abode boasts wallpaper depicting many types of international sausage, from bratwurst to chorizo. It also has shower doors featuring the silhouette of a pig and giant hot-dog cushions. There are wurst places to stay, we suppose.

1 The S&P 500 Index is an unmanaged index considered representative of the U.S. stock market. Indexes are unmanaged and have been provided for comparison purposes only. No fees or expenses are reflected. You cannot invest directly in an index.

2 The FTSE 100 Index is a market capitalization-weighted index of the 100 largest companies traded on the London Stock Exchange.

3 The FTSE World Europe ex UK Index tracks the performance of large- and mid-cap stocks in developed markets in Europe, excluding the UK.

Companies are mentioned for illustrative purposes only and should not be taken as a recommendation to buy or sell any security. It should not be assumed that recommendations made in the future will be profitable or will equal the performance of the securities in this list.

International investing entails special risk considerations, including currency fluctuations, lower liquidity, economic and political risks, and differences in accounting methods; these risks are generally heightened for emerging market investments. Stocks of small and mid-cap companies carry greater risk, and more volatility than equity stocks of larger, more established companies.

ID: US-250219-83830-1