Last week, global stocks ended the week mostly mixed with the biggest gainer being the NASDAQ, which was up 1.58%. The biggest loser among the developed countries was UK’s FTSE which was down 1.7%. The major news of the week came from China, which announced that it would take control of Anbang, one of the largest insurance companies in the country. A report on Sunday’s Financial Times showed that the company’s fall would have been comparable in size with the fall of Lehman Brothers.
Another major news during the weekend came from Warren Buffet, the Oracle of Omaha. On Saturday, he released his annual letter to shareholders. In his financial report, his company, Berkshire Hathaway reported more than $29 billion in tax-related profits. In an interview with Bloomberg, Warren said he was looking forward to making a large acquisition. Remember, he has more than $129 billion in cash to invest. Last year, he failed to acquire Unilever which means this year, he could attempt to buy another similar company.
Over the weekend, South Korea reported that North Korea was prepared to have conversations with the United States. As you recall, last year, North Korea was one of the major source of tension. The country showed its advanced technology of developing weapons that could reach the United States. On Friday, Trump’s administration continued to put a lot of pressure on the country by imposing more harsh sanctions. At the same time, a report showed that North Korea was turning to cyberwarfare to raise cash for developing its weapons. A stable Korean peninsula is very essential for world peace but, it will be difficult for the country to give away its weapons.
Another major news came from China. Over the weekend, the communist party announced new plans to scrap the constitutional two year limit for the president. The news was reported by the national media, following a meeting of the party leadership. To investors, this is an important news because it shows that Xi Jinping plans to solidify his power for years to come. This will give him unrivaled control over decision making. It will also make him the most powerful Chinese leaders since Mao. In October, the party named him the greatest living theorist and gave him powers to rule with no likely successor.
In the United Kingdom, Jeremy Corbyn’s Labor Party stirred new controversies when it opposed the proposals made by the current conservative plans. The new proposals suggest that the country remain closely aligned to the European Union. The new statement by Corbyn expected on Monday could precipitate a new election. Corbyn is not alone. Over the weekend, 80 prominent Labour Party officials signed a letter asking the government to back staying in the EU’s single market.
In the United States, a battle between Republicans and Democrats is ensuing. Over the weekend, the Democrats released a redacted memo that strongly opposed the previous memo from the republicans. Over the weekend, WSJ reported that Trump’s lawyers were considering having him testify before the counsel. As the probe nears Trump himself, will it affect the US markets or the dollar?