The autumn is traditionally a time of re-birth and new beginnings, from the back to school frenzy to the changing leaves and shifting winds. Last week Taylor Swift riveted popular culture with her new album and attempt to shed (like the skin of a snake) her previous personas, while in politics too, there have been attempts at a reboot, a distancing (Rex Tillerson’s statement that the President “speaks for himself”) and a resetting of the dialogue. In the UK, the Labour party performed a U-turn on its position on the single market, signaling a preference for remaining in the single market for an interim period (up to at least 2019 and possibly 2022 and the next general election), while details are worked out. This move was welcomed by the business community and generally perceived as pro-soft-Brexit by commentators. The overall effect is a continuing weakening of Teresa May’s hands as the vexed negotiations continue. Maybe the Brexit “fait accompli” will have to be rethought, just as in France, Emanuel Macron is hoping for a reset and that a redoubling of his commitment to Europe will salvage his dipping approval ratings.
Closer to home the Board of Uber announced the appointment of Dara Khosrowshahi, former CEO of Expedia, as the new CEO of the beleaguered ridesharing company – 9 weeks after the departure of founder and CEO Travis Kalanick. It was a process which revealed the cultural divide among venture capitalists (namely Benchmark) and founders as well as certain leanings of Board members. Uber’s attempt at a reset will be closely watched.
After last weekend’s Jackson Hole meeting, which was remarkable for its lack of bombshell revelations, markets seemed reassured and the Euro strengthened further against the dollar as Mario Draghi evinced little concern for Euro strengthening. US markets were firmer after the Jackson Hole non-event, and seemed to shrug off any market impact of the devastating storms in Texas, although gasoline was expected to rise in price in the short term.
They were less sanguine about the latest missile launch by North Korea though, as the missile traveled over Japan forcing residents of the Hokkaido area to take cover. President Trump responded by asserting “all options are on the table” and market jitters indicated a wariness regarding the ongoing provocation and potential end game in the North Korean scenario. These jitters were manifested in a weaker dollar, a spike in the VIX and defensive stocks, as well as the US 10 Year and a weakness in overall indices.