Investors are rapidly losing confidence in the government’s ability to secure a good Brexit deal, according to new data from Assetz Capital’s Q3 Investor Barometer.

The peer-to-peer business lender carries out its Investor Barometer every quarter, a survey of its 29,000-strong investor community.

The Investor Barometer has tracked Brexit sentiment since the start of 2018, and as the UK’s withdrawal gets closer, confidence of a positive outcome to the negotiations has dropped. In Q3, only 10% were ‘confident’ or ‘very confident’ of a good deal. This is down from 20% in Q2 and 21% in Q1.

Conversely, the number of ‘not confident’ or ‘not at all confident’ has continued to rise. The figure hit 90% in Q3, up from 80% in Q2 and 79% in Q1.

The results come following Chancellor of the Exchequer Phillip Hammond warned that a no-deal Brexit would lead to ‘large fiscal consequences’.

Stuart Law, CEO at Assetz Capital said: “Whatever optimism our investors had around the Brexit negotiations is slipping away. The view from the Assetz Capital community is that there’s significant economic pain on the horizon.

“Post-withdrawal, it will be more important than ever that the whole alternative finance industry works hard to deliver for both investors and borrowers. It’s when the economy struggles that growth capital becomes even more scarce. Peer-to-peer lenders must stand up and support the country through this Brexit uncertainty.”

(Source: Assetz Capital)

Zac Cohen, General Manager at Trulioo, discusses the key considerations for businesses before engaging in commerce in high-risk countries.

Doing business internationally is a complicated undertaking. Aside from the standard logistical challenges associated with doing business globally, organisations have to factor in considerations specific to different regions and countries. These considerations may include factors such as legislative, political, currency and transparency challenges.

Nevertheless, globalisation is storming ahead and businesses must be prepared to look beyond their domestic surroundings if they are to remain competitive in our global marketplace. International trade secretary Liam Fox has endorsed a move for UK-based businesses to adopt a more international focus, highlighting the importance of global competitiveness. Consequently, UK businesses are feeling the pressure to ramp up their efforts to target a more international consumer base. As if this wasn’t enough for international businesses and investors to grapple with, further complications and difficulties are liable to arise when doing business with “high risk” countries.

1. Fraud and Corruption

A recent study by the World Bank estimated that an extra 10 per cent is added to the cost of doing business internationally as a direct result of bribery and corruption.¹ Considering the immense amount of international trade, this figure is significant. The danger of doing business with countries considered to be “high risk” – defined by the Financial Action Task Force (FATF) as any country with weak measures to combat money laundering and terrorist financing – is the heightened potential of inviting transactions that are either fraudulent or otherwise corrupt.¹ The following considerations should be carefully observed before entering into any commercial dealings with a country considered to be high-risk.

2. Enhanced Due Diligence

As a result of the 4^th Anti Money Laundering (AMLD4) directive, developed by the European Union, businesses have to adopt a risk-based outlook. The AMLD4 specifies that EU-based businesses must collect relevant official documents directly from official sources like government registers and public documents, rather than from the organisation in question. If a potential trading partner is located in a high-risk country, or serves an industry that has a higher than normal risk of money laundering, then that partner must conduct Enhanced Due Diligence (EDD) on the business entity. This Enhanced Due Diligence process involves additional searches that must be carried out by any firm seeking to do business with this kind of organisation. These searches may include parameters such as the location of the organisation, the purpose of the transaction, the payment method and the expected origin of the payment.

3. Ultimate Beneficial Owners

AMLD4 also outlines the need to discover the ultimate beneficial owner of a business, whether they are customers, partners, suppliers or connected to you in another business relationship.

According to the Financial Action Task Force (FATF),

Beneficial owner refers to the natural person(s) who ultimately owns or controls a customer and/or the natural person on whose behalf a transaction is being conducted. It also includes those persons who exercise ultimate effective control over a legal person or arrangement.

This is important as businesses need to understand who they are dealing with when physical verification is not a practical option. Difficulties could arise when verifying UBOs in high-risk countries as some national jurisdictions impose secrecy policies which block access to verification documentation. This problem is compounded when checking UBOs against international sanction and watch lists as there are more than 200 lists, which vary in scale and uniformity.

4. Virtual Identification

However, verification can still be successful. Many are now turning to software that helps businesses to perform the necessary diligence checks. We gave a lot of consideration to the specific complexities of working with high-risk countries when developing our Global Gateway platform. Programmes such as these are designed to allow companies to perform the Enhanced Due Diligence, Know Your Business and Know your Customer checks that are required when doing business internationally, particularly with high-risk countries. Compliance with the various pieces of legislation on this topic should be at the forefront when implementing the necessary verification checks.

Across the world, markets are becoming increasingly more open, paving the way to a truly global economy. If companies can get to grips with the key due diligence requirements, this is a move that will ultimately benefit the global consumer and customers alike.

The longest bull market rally in history has further to run – but investors may wish to start to build cash positions before next year.

The message from Tom Elliott, deVere Group’s Senior International Investment Strategist, comes after the S&P 500 index reached a new all-time high late August, and recorded its longest ever rally (which began in March 2009).

Mr Elliott comments: “Wall Street is celebrating the longest stock market rally in history. One suspects it has further to go, given that the current defining features of the U.S. economy - strong growth and a cautious Fed - are an investor’s dream.

“This happy combination can be seen in last week’s upward revision to second quarter U.S. GDP growth estimates, to 4.2%, which comes just a week after Fed chair Jay Powell promised caution over the pace of interest rate hikes next year in his address at Jackson Hole -- although he did as good as confirm two more rate hikes this year, in September and December.

“Furthermore, global stock and credit market valuations are more attractive than at any point this year, thanks to corporate earnings growth outpacing share price growth.”

He continues: “But while the outlook for Wall Street over the coming months appears good, as we go into 2019 investor sentiment towards the U.S. stock market may change sharply.

“Cautious investors may want to start building up cash positions, and so take advantage of any sell-off.

“After all, the Fed’s caution is justified: many economists suspect that behind the current GDP growth spurt are temporary boosts to the economy, such as tax cuts and strong exports of goods ahead of the imposition of counter tariffs by America’s trading partners.”

He goes on to say: “Then we have political risk, whether over trade negotiations, North Korea, Iran, and the risk of the impeachment of Donald Trump, should the Democrats win control of the Senate in the mid-term Congressional elections.

“But perhaps the biggest risk to investors is the steady draining away of global liquidity, as central banks end or - in the case of the Fed, actually put into reverse - their quantitative easing policies.”

Mr Elliott concludes: “A diversified multi-asset portfolio remains the best protection against unpredictable markets.  This should contain exposure to global equities and bonds, with property, gold and cash also included. After all, a 2% return on dollar cash isn’t to be sneezed at.”

(Source: deVere Group)

The recent sell-off of Bitcoin and other cryptocurrencies was simply a standard market correction, observes the deVere CEO.

The comments from Nigel Green, Founder and CEO of deVere Group, come as Bitcoin – the world’s biggest cryptocurrency by market capitalisation – was close to almost its lowest point of the year two weeks ago and continued its bearish action last week. Other major digital currencies also experienced a sell-off over the last fortnight.

But the crypto market headed back into the green on Monday, posting positive results as the bulls push Bitcoin back on a rally.

Mr Green, whose firm launched the cryptocurrency exchange deVere Crypto at the beginning of 2018, says: “Cryptocurrency markets are subject to volatility more than traditional ones.

“Despite what the doom mongers would want you to believe, the recent sell-off was only ever going to be temporary and prices were bound to rise again relatively quickly – as they are now doing.

"Previous to this sell-off, in recent weeks Bitcoin had experienced a pretty impressive rally, peaking at around $8,300. As such, what happened over the last fortnight was simply a standard crypto market correction.”

He continues: “For many investors, such volatility, of the kind that we saw recently, is used as a welcome buying opportunity.

“They look at the bigger picture. That’s to say, in today’s world, a digital, global currency simply makes sense to them. Or to put it another way, they believe that cryptocurrencies are the future of money.

“Such investors also appreciate that institutional and regulatory support is increasingly inevitable and could happen sooner than many previously expected.

“In addition they are seeing for themselves how more and more global financial institutions, major corporations and household name investors are now working with cryptocurrencies and blockchain, the technology that underpins them.”

Mr Green goes on to say: “Increasingly, savvy investors are aware that what is taking place is a maturation of a relatively new market – hence the highs and lows almost every other week.

“As such, they understand that they either have to buy and take a long-term approach – as is typically the best approach with almost all investing - or be prepared to miss the boat.”

The deVere CEO concludes: “As anyone who has analysed the sector in recent years will know, the dips and peaks are a usual part of the cryptocurrency market.”

(Source: deVere Group)

Brian G. Sewell, Founder of Rockwell Capital; a family office committed to educating investors about cryptocurrency, and Rockwell Trades, below explains the intricacies of cryptocurrencies, shares the latest SEC regulatory updates, and provides expert insight into the future of cryptocurrencies across the globe.

The August 6th SEC decision to postpone a ruling on whether to approve the SolidX Bitcoin Shares ETF for trading on The Chicago Board Options Exchange is a good sign. Given previous SEC statements, the postponement appears to suggest that the U.S. regulatory agency wants to issue a well-thought-out approval ruling that protects cryptocurrency investors and nurtures innovators. I agree with the CBOE that "investors are better served by products traded on a regulated securities market and protected by robust securities laws.” And I would rather see the SEC make a methodical decision to approve a cryptocurrency ETF, with thoughtful guidelines than a rash decision to reject one.

Bitcoin’s Challenges and Promise
Since 2010, when it emerged as the first legitimate cryptocurrency, Bitcoin has been declared “dead” by pundits over 300 times. Critics have cited the cryptocurrency’s hair-raising price volatility; it’s scalability challenges, to handle a large volume of transactions as a payment method, or the improbability of a central bank ceding monetary control to a piece of pre-set software code. T he adoption of Bitcoin as an alternative to transacting by credit card or other payment methods is rising. After its release as open-source software in 2009, Bitcoin alone has facilitated over 300 million digital transactions, while hundreds of other cryptocurrencies have emerged, promising to disrupt a host of industries.

Granted, no more than 3.5% of households worldwide have adopted cryptocurrency as a payment method. But as developers and regulators resolve the following key issues, global cryptocurrency adoption will likely grow -- both as a consumer payment method, and through business-to-business integration, streamlining a variety of operations in the private and public sectors. The prospect of more widespread adoption explains why I think cryptocurrencies may continue to outperform other investment assets in the long term and improve how the world does business.

Four Key Reasons Why Cryptocurrency is Here to Stay:

1. An SEC-Approved Bitcoin ETF Can Boost Liquidity, Protect Consumers, and Nurture Innovators
Though the SEC may not reach a final decision until next year on the proposed listing of SolidX Bitcoin Shares ETF, I think the agency will eventually approve what many experts say represents the best proposal for a cryptocurrency ETF. The proposal -- which requires a minimum investment of 25 Bitcoins, or USD 165,000 assuming a Bitcoin price of $6,500 -- seems to meet the SEC's criteria on valuation, liquidity, fraud protection/custody, and potential manipulation.

By boosting institutional investment, SEC approval would represent another milestone in the validation of cryptocurrencies. To reiterate, rising adoption could benefit the U.S. financial system and other financial systems worldwide, because cryptocurrency promises to create significant financial savings and societal benefits -- by streamlining how the world transacts for goods and services, updates mutual ledgers, executes contracts, and accesses records.

2. Comprehensive U.S. Regulation Can Improve Protection, Innovation, and Investment
Beyond a potential Bitcoin ETF, demand is mounting for a comprehensive regulatory framework that protects consumers while nurturing innovation. Because the dollar remains the leading global fiat currency, institutional investors across the globe are especially watching for what framework of rules and policing U.S. regulators develop. Although many institutional investors are assessing the risk/reward proposition of cryptocurrency investments, that doesn’t mean they’re ready to invest. Many such endowments, pension funds, and corporate investors are awaiting U.S. regulatory guidance and protections to honor their fiduciary duties. How, if at all, for example, will exchanges be required to implement systems and procedures to prevent hacks and otherwise protect or compensate investors from cyber attacks?

Though there’s mounting pressure on regulators to act, cryptocurrency regulation that both protects consumers and nurtures innovation requires a nuanced set of rules, a sophisticated arsenal of policing tools, sound protocols, and well-trained professionals. Developing such a unique strategy takes time, and may involve some stumbles. But I think U.S. regulators will eventually succeed in developing a comprehensive and balanced regulatory framework for cryptocurrency. If institutions become more confident that regulations can help them meet their fiduciary duties, even small allocations from reputable endowments, pensions, and corporations could unleash a new wave of investment in cryptocurrencies.

3. Bringing the Technology to Scale
Bitcoin and other cryptocurrencies are still developing the capacity to function at a mass scale, which will require processing tens of thousands of transactions per second. But technology such as Plasma, built on Ethereum, and the Lightning Network, a second layer payment protocol compatible with Bitcoin, are being tested, which could enable cryptocurrencies to execute faster, cheaper payments and settlements than any other payment method. Though developing applications that bring cryptocurrencies such as Bitcoin and Ethereum to scale may not happen overnight, I think sooner or later; developers will get it right.

Making cryptocurrency scalable would probably unleash an explosion of new applications. That would boost adoption by allowing consumers and businesses to more easily take advantage of cryptocurrency by seamlessly integrating it with debit and credit payment systems – again, to execute transactions, update mutual ledgers, execute contracts, and access records. Such financial activities would likely happen more quickly, cheaply, and efficiently than ever because there would be no banking intermediary needed to validate the transaction and take a cut of the fees. This could improve the cost and efficiency of commerce – between businesses, between businesses and consumers, between governments and consumers, between nonprofits and consumers, and in every combination thereof. The seeds for this transformation of commerce have been planted, and like the internet before it, can innovate in ways we can’t fully anticipate.

4. Meeting Developing World Needs
At its current technological stage, use of cryptocurrency adoption as a payment method could grow fastest in emerging markets, especially those without a secure, reliable banking infrastructure. Many consumers in such regions have a strong incentive to transact in cryptocurrency -- either because their country’s current banking payment system is inefficient and unreliable, and they lack a bank account altogether. Globally, 1.7 billion adults remain unbanked. Two-Thirds of them own a mobile phone that could help them use cryptocurrency to transact and access other blockchain-based financial services.[2]

Data underscores the receptiveness of Developing World consumers to cryptocurrency as a transaction medium. The Asia Pacific region has the highest proportion of global users of cryptocurrency as a transaction medium (38%), followed by Europe (27%), North America (17%), Latin America (14%), and Africa/The Middle East (4%), according to a University of Cambridge estimate.[3] Although the study’s authors caution that their figures may underestimate North American’s proportion of global cryptocurrency usage, they cite additional data from LocalBitcoin, a P2P exchange platform, suggesting that cryptocurrency transaction volume is particularly growing in developing regions, especially in:

• Asia (China, India, Malaysia, Thailand)
• Latin America (Brazil, Chile, Colombia, Mexico, Venezuela),
• Africa/The Middle East (Kenya, Saudi Arabia, Tanzania, Turkey)
• Eastern Europe (Russia, Ukraine).[4]

As more applications launch in the developing world to facilitate the use of cryptocurrencies to buy and sell goods and services at lower cost and in expanded markets -- and more young people receptive to such new technologies come of age -- cryptocurrency adoption could well rise exponentially.

Remember The Internet - Investment Bubbles and Bursts Will Identify The Winners
High volatility is inherent in the investment value of this nascent technology, due to factors including technological setbacks and breakthroughs, the impact of pundits, the uneven pace of adoption, and regulatory uncertainty. Bitcoin, for example, generated a four-year annualized return as of January 31st, 2018 up 393.8%, a one-year 2017 performance up 1,318% -- and year-to-date, down 52.1%. Bitcoin has experienced even larger percentage drops in the past, before resuming an upward trajectory.

I believe roughly thirty percent of Bitcoin investors over the past half year are speculators since the cryptocurrency has dropped on the negative news by as much as a third. In my view, Bitcoin and other cryptocurrencies will experience many more bubbles and bursts, in part, fueled by speculators, who buy on greed and sell on fear.

But as the dot-com era underscores, the bursting of an investment bubble may signal both a crash and the dawn of a new era. While irrational investments in internet technology in the 1990’s fueled the dotcom bust, some well-run companies survived and led the next phase of the internet revolution. Similarly, despite periodic price crashes, I believe a small group of cryptocurrencies and other blockchain applications, including Bitcoin, will become integrated into our daily lives, both behind the scenes and in daily commerce.

Although “irrational exuberance” will continue to impact the price of cryptocurrencies, this disruptive technology represents the future not only of money but of how the world will do business.

Said markets present anticipated price developments daily, weekly, monthly and yearly, and when scouting for profits, bidding investors will act according to the market sentiment.

If the anticipated price development of a market’s stock is upwards, meaning the value of certain stock is rising or expected to rise, as a consequence of trends, single events, supply materials, current affairs or many other factors, the market sentiment is expressed as bullish. Vice versa, if the anticipated price development is on the downtrend, by any of the same reasons, the market sentiment is expressed as bearish.

It isn’t always as simple as this however. Market sentiment is also considered to be a contrarian indicator. For example, extremely bearish markets may subsequently display dramatic spikes – the turning point for this is often where the risky decision making appears.

Market sentiment, the overall expression of a certain market as bullish or bearish, is normally determined by a variety of technical and statistical methods that factor in the comparisons of advancing & declining stocks as well as new lows & new highs in the market. One of these is known as the Relative Strength Index (RSI); it relates the number of assets bought to assets sold, indicating whether capital is flowing in or out of the market in question. Normally, as a market follows sentiment either way, the flock follows, meaning the overall movement of the market’s stock follows the market sentiment directly. To quote a popular Wall Street phrase: “all boats float or sink with the tide.” The more investors buy, the more investors buy; it’s usually exponential development.

This of course could happen indefinitely, if it weren’t for the fact that as stock trading volumes rise, as does the price. Eventually the price hits a market high and the potential for profits is minimized. At this point the fall to a bearish market usually comes to fruition. On the other hand, as trading volumes fall, prices go down, to the point where eventually the price is so low it would be foolish not to buy, therefore turning the market on its head.

As obvious as it may seem, the words bullish and bearish reflect exactly what you would expect and are not simply paraphrases. An optimistic investor, happy to buy, buy, buy as the market sentiment is bullish, is considered a bull; aggressive, optimistic and almost reckless, striking upwards with its horns. Equally a bearish investor is considered a bear because he or she does not trade without utmost consideration, he or she is pessimistic towards trading expectations and believes prices will fall, or fall further than they already have. The bear therefore decides to sell, sell, sell, and pushes the prices down; as a bear that strikes its paws to the ground.

Make sure you check one of our top read features ‘The Top 10 Greatest Stock Market Trades Ever’.

While the uncertain impact of volatile market conditions, and of course Brexit, remain to be seen, businesses of all sizes are having to adapt to become more flexible than ever before. Even the most well-established businesses with enough capital to sustain sudden expenses, are reviewing what were previously assured and predictable growth plans. Philip Sugden, Operations Director at Portal Group UK, explains more for Finance Monthly below.

A business’s property profile is one of the most costly financial investments to be made and over the years the associated fixed rental rates are amongst the standard steps taken in establishing a solid presence for your business.

That cost certainty however, came at a price of the flexibility that is now critical in the modern and reactionary market place.

New businesses are growing at an entirely unpredictable rate while some large established businesses are seeking the autonomy to customize a workspace to better respond to supply and demand. However, with office space at a premium, both large and SME businesses are finding it harder to find a premises that can fill their present and future without breaking the bank.

The possibility that you might need to expand, reduce, reallocate or relocate your workforce at the speed required, particularly for example in the contact centre environment, is extremely costly and entirely impractical under the traditional office lease.

Whether a business is expanding or simply relocating due to success or commercial needs, budgets can no longer be front-loaded into capital expenditure laden construction or leasing of properties.

When considering the growing need to balance financial flexibility with cost certainty in the UK, it’s also interesting to note that our leasing habits differ vastly from the norm abroad. For example, while companies here have traditionally committed to the surety of long 10, 15 or even 20 year leases, the average is closer to three years in the US or India.

While these short-term lets would be at odds with the business growth plans of most UK businesses, more and more businesses of all sizes are increasingly exploring more flexible yet capex-free models.

The likes of managed office solutions (MOS) financial packages, which combine property acquisition, workspace design, fit out, facilities management and supporting services, reflect the emphasis now being placed on financial flexibility and the more expansive use of fluid operating costs (opex).

With simple, streamlined systems and structured terms, business owners can invest their time, effort and money into their businesses, not bricks and mortar.

Simply put, the new wave of shared offices options are allowing start-ups and multinational businesses alike to not only access all the amenities they need at a cost-certain price, but to work within a flexible financial model that fosters their own unique growth and culture.

In the past year MIFID II has enticed change and development across the financial markets and research sector. Here Fabrice Bouland, CEO of Alphametry, analyses said change and the impact it has had on innovation.

Six months in and MiFID II research unbundling regulation has appeared to create an even worse market for investment research than we had previously. With many commentators decrying the ‘unintended consequences’ of the new legislation – namely bringing the research market to a grinding halt as asset managers assess their needs and sparking a price war which has all but crippled smaller, niche research houses – one might wonder if there is anything positive to say about the impact of MiFID II on the research market and whether anything which can be done to revive it?

In truth, MiFID II has ultimately shown us the historical ambiguity investment managers have always had with research. There has never been an easy way to answer fundamental questions like ‘what research is needed’, ‘how much should we pay for it’ and ‘how do we measure the value’. This lack of structure has been pulled well and truly into the spotlight under the new EU regulation, as well as the financial services sector’s slow take-up of new technology to answer these questions.

Thanks in some part to the new regulation, active management might be at a historic turning point. The progress in investment technologies is about to experience a quantum leap forward plus the expected deluge of new alternative data will unleash an unprecedented potential. R&D and new technology must play a leading role in this and MiFID II can claim credit for creating this opportunity to innovate.

Time to innovate

From a buy-side perspective, research providers need to adopt entirely new strategies to survive.

In the past six months, we have seen two developments. Firstly, Tier-1 providers are pushing content exclusively on their websites. This is a step back from a user experience perspective as remembering numerous passwords is impractical for portfolio managers to the extent that some have cut providers which do not provide easy access to their portals. Distributing research via aggregators or marketplaces in order to reach the maximum number of channels is another option in today’s market. This could be applied to any type of research or data, in whatever format, for the easier and faster use of the portfolio manager.

The second innovation we are starting to see is from research providers who, in response to plummeting prices, are reducing the number of analysts and opted for more automated production. Commerzbank is one provider which is experimenting with artificial intelligence to see if it can write basic analyst notes automatically to trim research costs.

Alternative research and AI

With regulation forcing active managers to value their historical research franchise, it’s become clear that research has barely evolved whereas the world of investible assets has changed dramatically. Factors affecting a company’s valuation go way beyond the simple analysis of its financials or strategy.

The rise of alternative datasets which cover a wide range of digital inputs from social media to credit card data, are becoming increasingly valuable to asset managers. In many ways, the rise of alternative data is one of the first manifestation of how research is changing for the better under MiFID II.

Similarly, the research product may no longer be exclusively research reports but also the technology layer which is able to extract intelligence from them automatically, quickly and at scale. Since the buy-side has always heavily relied on the sell-side when it comes to technology, most active investors are stuck in a technological gap. Capturing and processing a more and more sophisticated and voluminous information resource seems the way forward.

Is MiFID II helping or hindering innovation in financial markets? It already seems that asset managers are considering how tomorrow’s technology is affecting today’s research – let’s hope the speed of implementation can match the exponential changes in data volume and value which we are seeing in the wider world.

Below Rebecca O’Keeffe, Head of Investment at interactive investor, comments on the latest global market updates offering insight into the recent Ryanair strike debacle and Brexit progress.

Global markets continue their malaise, as trade tensions weigh on sentiment amid fears that global growth will slow. With no major catalysts to drive the market higher, the risks are on the downside and the danger is that equity markets will drift lower. Earnings will allow individual stocks or even sectors to out or underperform, but the broader indices are likely to find it more difficult to gain traction.

What a difference a week makes. Just last week, Theresa May appeared to have come up with a revised vision of Brexit that offered a middle ground and might have delivered a softer Brexit. However, resignations, rebellions, concessions and amendments now mean that it is difficult to be sure what the UK’s position actually is.  With May’s government somewhere between a hard Brexit and no deal, it will be very difficult for Europe to sign off on any deal based on the current UK confusion. The summer recess may provide some respite, but as the weeks ticks by the prospect of no deal is rising rapidly and the impact on sterling could become more severe than it already is, and international companies may once again begin to rachet up the rhetoric regarding the very real risks of a bad deal.

Ryanair are suffering multiple threats, all of which are weighing on the bottom line. Sustained higher oil prices, air traffic control strikes in Europe, bigger wage costs and increased competition are all problems for the low-cost airline. Ryanair has historically been reasonably good at hedging their oil exposure, but prolonged higher prices have increased their costs. Strikes by European air traffic controllers, in particular in Marseilles, have wreaked havoc for many European airlines, causing significant cancellations and disruption. Further strikes by Ryanair pilots are adding to their woes, alongside additional staff wage costs for pilots. The prospect of further competition in the low-cost sector from IAG is another headache that Ryanair could do without. Some of these headwinds are generic and some are self-made, but it is difficult to see much upside for Ryanair in the short term.

In light of recent reports, David Jones, Chief Market Strategist at Capital.com here comments on the impact of the meeting between President Trump and President Putin, and the US quarterly earnings season, on the financial markets.

At the start of the trading week, politics remains in focus for many markets. Last week saw President Trump visit the UK and today he meets with Russia's President Putin. Apparently, there is no formal agenda for the meeting but of course given both personalities involved here there is always the possibility of surprise which could have an impact on markets.

The end of last week saw a very strong finish for stock markets - in the USA the broader S&P500 index finished at its best levels in more than five months. The question now is whether there is enough momentum left to challenge the all-time high set in January of this year. There's plenty of news-flow for stock markets this week as the US quarterly earnings season continues with the likes of Netflix, Goldman Sachs, eBay and Microsoft all reporting. For the UK, the state of the High Street remains under focus with the latest retail sales due out on Thursday. The latest UK retailer under pressure is department store Debenhams with the weekend press reporting that its credit insurers were tightening terms. The share price of Debenhams has lost more than 50% of its value so far this year.

Last week was relatively quiet one for major currency markets. The pound continues to swing on various political resignations and utterings from the UK government but is broadly unchanged over the past three weeks. It's a big week for UK economic data with the latest unemployment numbers released on Tuesday and inflation on Wednesday - the CPI reading is expected to show 2.5%. It could well mean more volatility for the pound in the days ahead.

The price of oil continues to flip-flop around the $70/barrel mark. Although this has recently set three-year highs, it has been somewhat directionless in recent weeks. Perhaps there is something from today's Trump/Putin meeting that will inspire traders to pick a side and set up a more meaningful push here.

In light of last week’s events surrounding markets and Brexit talk, Rebecca O’Keeffe, Head of Investment at interactive investor comments for Finance Monthly.

There is no doubt that President Trump has been highly positive for US equity markets, which has fed through to rising global markets, but his increasingly erratic behaviour is making it very difficult for investors to work out whether he remains a friend or foe. His America first policy is designed to play well at home, but in classifying the rest of the world as competitors rather than allies, he has increased tensions and raised geopolitical risks for investors.

Bank of America, Blackrock and Netflix all report second quarter earnings today, which may provide further clarity for financials and the outperforming technology sector. Mixed results from three of the big US banks on Friday saw bank stocks fall, so today’s figures from Bank of America should provide further clarity for financials. Technology stocks have been the place to be invested in the first half of the year with the Nasdaq up over 13% compared to relatively flat performance elsewhere. The first of the FANGS to report, Netflix earnings are hugely important for investors to confirm whether the outperformance of technology stocks is warranted or if the market has got ahead of itself.

Calls for a second referendum and a coordinated effort by Brexiteers to undermine Theresa May’s policy and position means this could be a make or break week for the Prime Minister. Having set out a radical plan to seek what she believes is the best possible deal for the UK economy, Theresa May must now try to sell the deal to parliament this week. The hard-line Brexiteers have already indicated their objections, but they could also instigate a direct challenge to May’s leadership if they can secure the 48 Tory MP signatures necessary for a leadership ballot. After months of failed negotiations and an increasingly divisive government, this week is pivotal for Theresa May.

Cristiano Ronaldo may be out of the World Cup, but he certainly is not out of the headlines. With each passing year the football and financial worlds have become ever more entwined and the recent excitement around Ronaldo wearing Juventus colours has resulted in colossal movement in the markets. Below Carlo Alberto De Casa, Chief Analyst at ActivTrades, discusses the prospects and impacts of Ronald’s moves on the markets.

Juventus is one of three Italian team teams to be publicly listed on the stock exchange but as the biggest club in Italy by some distance, both in stature and in finance, it’s not unsurprising a move for the five-time Ballon D’or winner has caused a seismic shock.

The Old Lady of Turin has won the last 7 Serie A title in a row but has been missing the Champions League from its collection since 1996. Having lost 5 finals in the biggest European competition for clubs between 1997 and 2017, this is seen as a move to undo this spell.

On Monday evening speculation began that Ronaldo could be on his way to Italy. Juventus were trading at about 66 cents per share then. In just 3 days of trading the value of the shares jumped to a peak of 0.81, a new 5-month-high. Given that the club has more than 1 bn shares, the total capitalization of Juventus jumped by around €150 million.

On Friday, Juventus shares jumped further to 0.90, adding another 90 million of market cap and reaching a 16-month high, on levels seen last time when Juventus reached the final of Champions League in 2017.

Only 34% of the club is listed on the stock exchange however, and another significant increase of the value of the club was reported by Exor, the holding of FCA (formerly known as car manufacturer FIAT), who control the remaining 63.7%. Exor now says it is seeing a theoretical increase of their assets by around €400 million.

It’s also thought that FIAT will play a crucial part in this deal, paying a part of Ronaldo’s salary and using him as a testimonial for their cars. The exponential jump in the volume of shares is also staggering with around 15 million of shares traded yesterday and over 38 million by Thursday.

Of course, it might all be a risky investment. With shares that could continue their rally but could also quickly turn in the opposite direction if the “affaire Ronaldo” is not going to become reality. The market movement however is certainly helping to shift the balance of the company even if we are not talking in real cash money.

But what does this all mean?

Juventus will be hoping to make a large amount of money from this operation and the markets also believe that this could be excellent from a financial point of view, despite its huge costs. Once you account for marketing, the receipts from shirt sales and ticket prices in the stadium (prices for tickets at the Juventus stadium just went up by around 25-30%) its clear to see how with a little help from the markets, a transfer of this magnitude can begin to pay for itself. Pundits often discuss how much clubs are paying for players – but often forget to discuss how much a club can claw back in return.

Juventus mught need upwards of €200m to complete a deal for Ronaldo over four years. They are willing to pay him €30 million a year but once taxes are factored in it could be higher at maybe €55million. A four-year contract including his transfer fee of €100 million could therefore take this to an astronomical amount. The questions is – how much will Juventus actually end up paying?

Figure 1: The Juventus share price since speculation began.