Market Commentary

No one expected a simple “yes / no” referendum on Brexit to end in such chaos. With an array of options to break the impasse being voted down over the last month, time extensions seem inevitable.

Prime Minister May’s determination and unbreakable resilience has turned from an asset into an impediment. Labour leader Jeremy Corbyn remains non-committal and seems more interested in forcing an election than helping the Conservatives with a resolution. It is a mess – and for this reason we have remained underweight to UK equities and Sterling while we watch it play out.

Hipster Anti-Trust Theory:  Tech players globally are under the spotlight for their practices and impact on their markets. The likes of Amazon, Facebook and Google can crush or buy competitors to retain their market control. It is widely recognised that traditional anti-competition rules (which focus on the impact for consumers of monopolistic behaviour) are just not working. The big tech companies drive down prices and seem to benefit consumers. What is now widely known as the “Hipster Anti-Trust Theory” is a change of focus from the effect on consumers to the effect on competitors. New regulation won’t be welcomed by the large global tech giants, but is looking increasingly likely (source: Fortune Magazine).

Lobbying is alive and well: You’d expect the oil and gas industry to be the most prolific at lobbying US politicians. But in fact it is the large tech companies – the 5 largest spenders are Google, Amazon, Facebook, Oracle and Microsoft – their combined spend exceeds the entire oil and gas industry lobbying! (source: Fortune Magazine).

Will AI take my job?  Who knows what industry is next under threat from artificial intelligence. Callaway, a leading golf club maker, has traditionally had a slow and labour intensive approach to designing a new club usually involving 5 to 7 hand made prototypes. Their fancy new AI designed club line – called “Epic Flash” involved algorithms making an astonishing 15,000 virtual prototypes – and it has become the only golf driver ever to score 20 out of 20 in the Golf Digest ratings. AI proved itself to deliver not only a fast result, but also a near perfect one… These step changes will become increasingly common… and scary for workers…

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