Stock market

Bernard Looney shows why every board should be braced for scandal

Bernard Looney, the fallen BP chief, always had a certain swagger about him. I’ve no idea whether he was unsafe in taxis, but he was certainly prone to unguarded remarks. ‘Not every barrel of oil in the world will get produced’ was a bold way, back in 2018, to introduce BP shareholders to the idea that the world’s energy giants will one day have to strand remaining carbon assets if they really intend to achieve net-zero targets. ‘This is literally a cash machine’ was not the best way to describe BP’s profit performance in November 2021, when British households were beginning to feel the pain of soaring energy bills. And

The capitalist nihilism of WallStreetBets

When Croatian movie director Dario Jurican ran in the country’s presidential election in 2019, his campaign slogan, ‘corruption for everybody’, promised that normal people would also be able to profit from cronyism. The people reacted with enthusiasm although they knew it was a joke. A similar dynamic is present on the WallStreetBets subreddit, which subverts the financial system by over-identifying with it or, rather, by universalizing it and thereby revealing its in-built absurdity. The story is well-known already, but let’s briefly recap. Wallstreetbets is an online group in which millions of participants discuss stock and options trading. It is notable for its profane nature and promotion of aggressive trading strategies.

The Brexit deal has left the City to fight for its own future

‘This Article shall not apply with respect to financial services.’ That’s what it says on page 92 of the EU-UK Trade Co-operation Agreement, and my search engine has found nothing else in the monster document offering any comfort to the sector, which contributes £130 billion to the UK economy and provides more than a million jobs. That’s in marked contrast to fishing — £1.4 billion, 24,000 jobs — which gets a compromise settlement (pages 919-925, if you’re keen) accounting for every last haddock, hake and horse mackerel. No great surprise in a Brexit process in which political symbolism trumped economic sense at every turn: but does it mean our bankers

Coronavirus might not be all bad news for the stock market

There cannot be many positive aspects to the coronavirus outbreak, but I wonder if it carries one for stock markets.  We had been told repeatedly, before all this, that the markets badly needed a ‘correction’ after their uniquely long bull run. If they were now sliding because of a banking or commercial event, confidence might collapse. If, however, they are falling because of a disease, will it also mean that confidence will recover more quickly once the disease is contained? This is an extract from Charles Moore’s Spectator Notes, available in this week’s magazine.

Why I’m boycotting ‘Davos in the Desert’

The current stock-market correction has been steaming down the track since August and I claim no wisdom for having predicted it: the FTSE100 dipped below 7,000 at the start of the week, having shed all of the 10 per cent it had gained since it began to surge in April. Weaker UK growth forecasts from the EY Item Club, reflecting the impact of the Brexit impasse on business and consumer confidence, are just one factor in the autumnal mood. But let’s cheer ourselves up with a round of applause for our veteran investor Robin Andrews, whose ‘Faangs to Banngs’ trading idea I offered you on 1 September. His proposition was

Is the UK uninvestable?

It is always a pleasure to spend time in the company of Messrs Neil, Nelson and Forsyth. True to form, an evening of lively dialogue, in a packed auditorium at the Royal Institute of British Architects, discussing the implications of the chancellor’s spring statement last week, did not disappoint. Prior to the event I have to admit to being a tad gloomy. This had less to do with the cold I was nursing, and more to do with a call I received recently from a broker friend of mine. He told me that one of his clients, running a multi-billion dollar global equity fund out of New York, had just

A return to normality

It is easy to mock the most strident critics of capitalism, like Bernie Sanders and Jeremy Corbyn. It’s harder to ask whether they might actually have a point. Consider the past ten years of evidence. Since the collapse of Lehman Brothers, wages for ordinary workers have been on the floor — even today, the average pay packet in Britain is lower than it was before the crash. The main response to the crisis has been to print money, through quantitative easing and ultra-low rates. This artificially inflates assets. And who benefits? Those who have the most assets: in other words, the very rich. Since the crash, the amount of wealth

London Stock Exchange picked a bad year to join a pan-European project

The marriage of the London Stock Exchange and Deutsche Börse may not be stone dead but that’s the way to bet, as Damon Runyan would have said. This so-called ‘merger of equals’ — with the Germans holding the larger stake and the top job but with the head office in London, at least to begin with — has foundered over a demand from EU competition authorities that the LSE should sell its majority stake in MTS, an Italian bond-trading platform. Having had its alternative proposal (to sell a French clearing operation) rejected, the LSE refused to comply, allegedly without first consulting its German partners. When this deal was announced a

Is the sale of our only global-scale tech firm to Japan a vote of confidence in the UK?

It’s easy to see why Arm Holdings, the UK’s only global-scale internet technology company, looked worth a quick £24 billion bet by Softbank of Japan. At $1.32 to the pound, the price is a lot cheaper than it could have been before polls closed on 23 June, when sterling stood at $1.50; that made it easy for Softbank to offer a fat premium over last Friday’s closing Arm share price — and harder for Arm’s board to say no. As for Arm’s business, it’s unlikely to be knocked by Brexit since its microchips are priced in dollars and sold chiefly to smartphone makers in Asia and the US. And its prospects —

The bust that wasn’t

It has been a month since the UK voted to leave the European Union — but something is missing. Where is the economic collapse? What of EUpocalypse Now? Where is the Brexageddon that we were promised? To the shock of many — not least business titans who bankrolled the Remain campaign — the instant collapse doesn’t seem to be happening. The UK economy is, for now at least, taking Brexit in its stride. The oft-predicted job losses? During the three weeks from 23 June, job listings were up 150,000 compared to the same period last year according to Reed Group, a recruitment consultant. ‘That’s an 8 per cent rise,’ says

If you’re riding the FTSE rebound you might still want to sell in May

When the FTSE100 fell close to 5,500 in February, we all said ‘Mr Bear is back’. On Tuesday the index hit a high for this year of 6,400, and we all wondered whether Mr Bear had done what I said he wouldn’t, and shuffled back to hibernation. But the truth is that shares have lately moved in parallel with the oil price, which has perked up partly for technical reasons including temporary curtailment of supply from Kuwait; and a major element of the FTSE recovery is in commodity stocks that had been wildly oversold. So we shouldn’t read any great swing of confidence into a market still 600 points down

This great commodity rally doesn’t mean that spring has arrived

All in all, this is an odd moment for an outburst of high spirits: not from me — I’m as phlegmatic as ever — but from commodity investors. The price of a barrel of oil has rallied from $27 to $40 after talks between Saudi Arabia and Russia about restricting supply; one pundit called that ‘meaningless theatre’ but others expect a climb back to $50. In a similar mood, copper prices have risen by almost a fifth — reflecting producer cutbacks combined with a belief that the Chinese downturn in demand might not be so severe as was first feared. Likewise iron ore, which surged so fast at the beginning

Apocalypse now? Markets seem set on a self-fulfilling prophecy

All this talk of a new financial apocalypse, so soon after the last one, is starting to annoy me. Partly because investors as a crowd are so irrational; -partly because so much that governments and central banks have done to contribute to the current market mayhem seems to work against the sensible efforts of ordinary folk to build a bottom-up recovery. Markets first. We’ve had hissy fits about China, even though connections between the Chinese and UK economies are so marginal. We’ve had near-hysteria about the prospect of (and in the US, the start of) rising interest rates. Now there’s a panic about European banks, because Deutsche Bank, midway through

Investment: This dragon won’t bite

At the risk of sounding like Neville Chamberlain, how bizarre that we should be panic-selling our stock-market investments in reaction to the news of a slight economic slowdown in a faraway country to which we export little and whose direct investments in our own economy created fewer than 5,000 new jobs last year. Throughout the mini-crash of 2016, it has become received wisdom that a Chinese slowdown is threatening the global economy, spreading contagion to every corner of the globe. The fear manifested itself in a 3.5 per cent drop in the FTSE 100 on Wednesday 20 January, a day when a flurry of good-news stories about the British economy, with rising

Mr Bear is back: sit tight because he may be with us for a while

Like Leonardo DiCaprio in The Revenant, we’ve just been savaged by a bear but we’ll probably survive. Leading UK-listed stocks have fallen 20 per cent from last April’s peak after a six-year climb, and the FTSE100 chart has taken on a saw-toothed downward trajectory that suggests, to those who rely on such indicators, that there are further falls to come. The end of quantitative easing and the US Federal Reserve’s first interest-rate rise in almost a decade set the direction of travel. The sinking oil price, combined with worries about a global debt build-up, darkened the mood. Repeated bouts of mayhem on the Shanghai bourse, though little or nothing to

The Spectator’s Notes | 21 January 2016

Many have rightly attacked the police for their handling of the demented accusations against Field Marshal Lord Bramall, now at last dropped. They ostentatiously descended on his village in huge numbers, chatted about the case in the pub and pointlessly searched his house for ten hours. But one needs to understand that their pursuit of Lord Bramall — though not their exact methods — is the result of the system. Because the doctrine has now been established that all ‘victims’ must be ‘believed’, the police must take seriously every sex abuse accusation made and record the accusation as a reported crime (hence the huge increase in sex abuse figures). Even if you

VW and the truth of engineering: say what you do, do what you say

Not that I was much of a boy racer, but the sexiest car I ever owned was a 1982 Volkswagen Scirocco with the lines of a paper dart and the cornering of a cheetah. I once drove it overnight from the City to Tuscany with a blind date who barely uttered a word, en route or afterwards. In an era when British factories could make nothing better than a laughable Allegro or a downmarket Escort, everyone coveted a German car — the top choice for twenty-somethings being the VW Golf convertible (Sciroccos were rarer) whose quality came as a revelation after years of broken fanbelts and burst radiators on unreliable

Cheer up: we’re robust enough to withstand a shock from China

Home from the hot Aegean, huddled by the fire as rain ruins the bank holiday weekend, I’m thinking: what gloom has descended since I’ve been away — and doesn’t it call for a round-up of cheerful news? So here goes. The UK economy grew by 0.7 per cent in the second quarter and a respectable 2.6 per cent over the past year. US growth has been revised sharply higher to 3.7 per cent, scotching our claim to be the fastest growing western economy, but George Osborne can still say convincingly that ‘we’re motoring ahead’ — and weak first-quarter performance can be seen as a blip rather than the revelation of doom

Gamblin’ man

When George Osborne visited Sweden, Finland and Denmark  the stock markets of each country promptly fell by about 5 per cent. As soon as he left, they recovered. A coincidence, of course: Osborne’s tour coincided with stock-market jitters, but this nonetheless forced him to look over the precipice — and panic. Britain, he warned, was ‘not immune to what goes on in the world’. Not for the first time, we saw his lips moving but heard Gordon Brown’s voice. ‘We are much better prepared than we would have been a few years ago for this kind of shock,’ he added. If only this were true. As the Chancellor knows, we

Martin Vander Weyer

Sorry, but I can’t join in the China panic

 MS Queen Victoria, 38°N 19°E I’ll do my best, but I’ve got to be honest: being surrounded by shining Ionian waters and convivial Spectator cruisers isn’t helping me channel the panic that has gripped global markets. So forgive me if this dispatch doesn’t have the apocalyptic tone you’re expecting. I’m as irritated as anyone that contagion from China’s share-gambling epidemic has knocked my modest interest in FTSE100 stocks back to where it stood in late 2012, but ask yourself: do you know anything about China or the global economy today that you didn’t know a month ago? Markets have overreacted, on relatively thin mid-August trading volumes, to a long-anticipated slowdown