20 March 2018

Social Media's Dieselgate?.

The risks include fines, increased regulation and a change in consumer preferences

The recent controversy over social media and the use of its user data is likely to persist. Many users may not understand that researchers can accurately profile individuals on something as simple as their Facebook “likes”. The potential for influencing in subtle ways both consumption and more controversially political behaviours through targeted advertising should be clear. Multiple investigations across jurisdictions may now cast a harsh light on business practices which may otherwise have continued under the radar. Global digital titans which have become in effect brokers of user data are therefore under threat on another front, in addition to a recently proposed digital revenue tax.

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29/03/2018
Illumination: Equity strategy and market outlook

In this month’s strategy piece, Alastair George believes that it is very easy to point the finger at US trade sanctions against China as a reason for the recent declines in equity markets. The prospect of a confrontation in the near term, in respect of access to markets and IP protection, is clearly unhelpful for global equity sentiment. However, the second dynamic at work during Q118 is a rapid rise in US LIBOR. At the same time, the US technology sector has suffered as the furore over the political use of personal data collected via social media risks fines, regulations and a change in consumer preferences, even if the crisis need not be existential for the industry if skilfully handled. We are now seeing a trend of weaker economic data in Europe and unweighted 2018 earnings estimates have continued to fall during Q1, if modestly. The benefits of US tax reform and the tailwind of economic momentum of 2017 are now in the rear view mirror. US and European equity investors will have to contend with a slowing of economic momentum in Europe, high valuations and tightening US monetary policy, in addition to significant headline risk in respect of a “trade war” over the next quarter.

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