This week, attention turned to the United Kingdom where the Brexit debate continued. On Tuesday, the house of commons voted against the deal that Theresa Maya has spent two years negotiating. The outcome of the vote was expected. After the vote, the opposition leader Jeremy Corbyn tabled a vote of no confidence against the prime minister. This vote happened on Wednesday evening and she survived again. The challenge now will be for the premier to come up with a deal that is acceptable by the UK parliament and the European Union. To do this, she will need to modify the backstop issue to ensure that the EU and the UK supports it.
The US government shutdown continued this week and there are no hopes that it will be reopened soon. The shutdown, which started in December was caused by the failure of the legislature passing a funding bill that can be acceptable to the US president. Donald Trump and republicans in the senate have insisted on a funding that includes at least $5 billion in border wall funding. Democrats on the other hand have rejected such proposal, saying that the wall is a waste of money. With the 2020 election nearing, there is a possibility that the shutdown may go on for a longer period. As a result of the shut down, Donald Trump cancelled his trip to Davos.
The earnings season kicked off this week after major banks released their earnings. The results were mixed with investors cheering results from Goldman Sachs, Citi, and JP Morgan. Yesterday however, investors received bad news from Morgan Stanley and Netflix. Morgan Stanley blamed the volatility in the final quarter for the disappointing earnings and revenue miss. A few days after Netflix raised prices for its services, the company released weaker-than expected results. While it added 9 million more subscribers in the quarter, the company saw a revenue miss. Since December, its stock has gained by more than 50%.
OPEC released the monthly report yesterday that showed a few things. It showed that OPEC member countries slashed output in December, which was in line with the outcome of the Vienna meeting. It also showed that there may be weaker demand of about 1.2 million barrels this year. The organization blamed this on the likelihood of a slowing economy.
This week, the financial world lost an important figure who helped revolutionize the industry. Jack Bogle was the founder of Vanguard, which is ranked as the second biggest investment company in the world after Blackrock. It has total assets of more than $5 trillion. Jack changed the industry by introducing index funds that anyone could invest in.