Published on: March 23, 2018

Congratulations. You have made it through another week (hopefully in one piece) and are staring down the barrel of the gun they call Friday.  And now that positive feeling can only grow as you read this week’s blog!

For those of you who embrace social media, #deletefacebook is currently trending after the Facebook/Cambridge Analytica scandal gained momentum.  To recap, Facebook is coming under huge pressure as it became known that data gathered from users of its platform was passed to Cambridge Analytica, purveyors of data and analysis, and allegedly used to influence voting within the 2016 US Presidential election.

Shortly after this story hit the press, Facebook CEO Mark Zuckerberg posted a statement, seemingly open to greater regulation of the data collected by social media platforms.  However and most notably he did not explicitly apologise, leading to a push for users to cancel their accounts, something that is apparently quite difficult to do.

However, what do users expect?  Facebook is free to use, essentially resulting in the “product” that the company offers being you, the user.  Your data is the commodity and signing up to the platform waives your rights to that data. No doubt this is the element that requires much greater transparency and regulation – however nothing is free – aside from my appreciation of all of my readers.  But y’all know that.

The knock on effect of all of this, for Facebook shareholders, is a considerable fall in value, resulting in an 8.5% fall in shares and a $45billion reduction in stock value.  Bank of America, Merrill Lynch, reduced its price target for the shares to $230 from $265, saying that Zuckerberg’s statements will not fix the negative sentiment against the company in the short term.

And it doesn’t get any better from a broader market perspective.  Regular readers (you guys are definitely my favourites) will remember the trade tariffs to be imposed by Donald Trump on imports of aluminium and steel and the immediate political fall-out from that.  Since then Trump has formally approved temporary exclusions from these tariffs until May 1 for Argentina, Australia, Brazil, Canada, Mexico, South Korea and the EU.

However, notable are the omissions from Asia and confirming this target, Don announced last night new tariffs on $50bn worth of Chinese imports following a seven month investigation into intellectual property theft which has been a longstanding point of contention in US-China trade relations.  In addition to the tariffs, the US also plans to impose new investment restrictions and take action against China at the World Trade Organisation. The Treasury Department will also propose additional measures.

In reaction, China announced its own tariffs today on $3 billion worth of US imports, which Beijing said was in response to the steel and aluminium tariffs announced earlier this month.  Furthermore, China’s embassy in Washington indicated that the country was up for a fight in a statement which said “China’s not afraid of, and will not recoil from, a trade war.”

As a result, Asian stockmarkets fell markedly overnight; in Tokyo the Japan Nikkei 225 index fell 3.75% to 20,782.78.  In Hong Kong, the Hang Seng Index fell 3.49% to 29,986.69 and in South Korea the KOSPI 50 fell 2.46% to 2,129.53.

So, for markets, the end of the week comes as some relief, with the majority of equity indices down.  However, this is how markets work and therefore, against the backdrop of the past 2 years extremely positive market returns, should not be too great a concern – a correction back to positive territory is expected.

Three Counties’ advice would be to simply understand where you are invested and revisit why.  When was the last time you discussed your investments?  When did you last review your holdings?  How long ago did you sit down and review whether your financial plans are on track?  Now is the ideal time to do so; give your investment plans a spring clean.  If you want to chat, you know where we are.

Keep it steady, live the dream and I will see you all next week.

Andrew out.

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