Weekly Market Update 29/11/2024
Donald Trump has pledged to impose tariffs on imports from Canada and Mexico of 25%, and China an additional 10% on top of current levies from his first day in office, according to a post made on Truth Social, his own social media site. In reaction, the Canadian dollar fell 0.9% against the US dollar to a four-year low, whilst the Mexican peso declined 1.3%. China’s onshore yuan did not react as dramatically, falling just 0.1%. These comments are just the start of what could be to come, as Trump’s presidential campaign focused on sweeping tariffs to try to protect US-manufactured goods, but also now seemingly to be used as a method of forcing countries to stem the flow of illegal immigration and drugs into the US.
Eurozone inflation rose to 2.3% in November, above October’s figure of 2%, the European Central Bank’s target, and the highest it has been for 3 months. This rise was in line with economists’ expectations who say the increase was down to a lower point of comparison when energy prices fell a year ago, and so should not deter the ECB from lowering rates again in December.
Shares in Direct Line leapt 37% to 216p on Thursday following the rejected takeover bid by Aviva. The proposal, made up of a combination of cash and shares in Aviva, valued Direct Line at £3.3bn, or 250p per share. Direct Line rejected the bid saying it was “highly opportunistic and substantially undervalued the company”. Aviva’s offer represented a 57.5% premium to Direct Line’s closing price of 158.7p on Wednesday. This is the second time this year Direct Line has been approached for a takeover, after it rejected an offer in February from Ageas of £3.1bn.
Andrea Wood, Chartered MCSI
Investment Manager
