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The monthly review: Aug top stories

12 days ago

QUICK LOOK
THE MARKETS

7.0%

S&P 500

3.1%

EURO STOXX 50

1.1%

FTSE 100

3.4%

CAC 40

5.1%

DAX 30

1.8%

BEL 20

2.8%

FTSE MIB

1.3%

IBEX 35

8.2%

TOPIX
   
        Source: Bloomberg 31.08.2020

The challenger is confirmed

Joe Biden was confirmed as the Democratic Party nominee to run against Donald Trump in November’s election. If he were to win, by the time of his inauguration he would be the oldest president in US history. His running mate is Senator Kamala Harris, potentially the first woman and South Asian American to hold the post of Vice President. Biden has promised $2 trillion of investment in green energy, as part of his ‘Build Back Better’ plan, with the additional aim of benefitting American workers. Markets made all-time highs, despite likely corporate taxation increases.

Big tech goes green

A game of catch up perhaps, after years of mounting criticism, but big US tech companies could now be leading the green agenda. Alphabet (Google’s parent company) has just launched the biggest green bond in history, for projects such as clean energy, energy-efficient buildings and helping governments deal with the aftermath of Covid-19. Apple and Google already source all their power from renewables, while Facebook should be able to make that claim by year end. The huge scale of their investment should speed technology developments in renewables and, crucially, also drive down prices. 

Blockbusters are back

Call it pent up demand, but recent activity in the M&A (mergers and acquisitions) market has been impressive. A number of $10 billion+ deals have been signed since the beginning of July, giving the fastest start to the second half since the megadeals boom-time before the crisis of 2008. Although some of these deals had been frozen by global lockdown, the rationale might not be simply to get bigger. As trading conditions get tougher, corporations might also view acquisitions as a defensive move. For industries hard hit by the pandemic, bigger scale might offer greater resilience.

 

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