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Commercial Awareness Update - March 2019!
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<blockquote data-quote="Abstruser" data-source="post: 10501" data-attributes="member: 260"><p><strong><u>Commercial Awareness Update - 27th March 2019</u></strong></p><p></p><p>Hi everyone,</p><p></p><p>The topics covered in this week's update are:</p><ol> <li data-xf-list-type="ol">Brexit update</li> <li data-xf-list-type="ol">Weak EU economic growth</li> <li data-xf-list-type="ol">Big Tech: Google vs EU</li> </ol><p>As always, please feel free to share your thoughts and comments below. Happy reading <img src="data:image/gif;base64,R0lGODlhAQABAIAAAAAAAP///yH5BAEAAAAALAAAAAABAAEAAAIBRAA7" class="smilie smilie--sprite smilie--sprite1" alt=":)" title="Smile :)" loading="lazy" data-shortname=":)" /></p><p></p><p><strong><u>1. Brexit update (by [USER=1160]@Alice G[/USER])</u></strong></p><p></p><p><strong>The story:</strong></p><p></p><p>Despite the turbulence of the last couple of weeks in Parliament, Brexit does not appear to be any more certain. Two points of significance have come to fruition in the last week.</p><p></p><p>The first is the petition to revoke Article 50. At the time of writing, the petition has been signed 5,741,638 times. Despite the great number of signatories, Theresa May has ardently stated that this is not something she would be prepared to entertain under her leadership. This isn’t too surprising given the groundwork that the Prime Minister has put into her own deal and it is highly unlikely that any leader would revoke Article 50 without exhausting all other means to reach a solution. However, what this petition does demonstrate is the exercise of democracy amongst the British people. It arguably shows the desire for people to be more actively engaged in this process which might well spur a greater call for a second referendum, the ‘People’s Vote’, to allow people that chance to have their say. (Interestingly, the Great Debaters Club have proposed the following ‘Is The Revoke Article 50 Petition Pointless?’ for their next debate.)</p><p></p><p>The second is the People’s March which took place on Saturday 25th March. Although the number of participants is debated, there was indeed a significant turnout of people. There was a great number of people attending the march who were not of legal voting age back in 2016, arguing that they deserve the right to vote on Brexit which will ultimately determine the nature of their futures.</p><p></p><p>May is still hoping to get the backing for her deal in a third vote. Jacob Rees-Mogg has indicated that he might consider backing the deal but the DUP still state they would prefer a year long delay over the proposed deal. If May cannot get the backing she needs to meet the agreed extension (22nd May) then she will need to return to Brussels on 12th April with alternative plans. MPs also voted to be allowed indicative votes to indicate where they think the Brexit process ought to go next. Theresa May has said she may not abide by the desire for indicative votes.</p><p></p><p><strong>Impact on law firms and businesses:</strong></p><p></p><p>There is daily uncertainty in Parliament which is never good news for the business world. M&A activity and transactional departments will be suffering from this uncertainty because of the way it stifles investments and deals. During bouts of uncertainty, it is hard for businesses to appraise the risks, benefits and likelihoods of potential deals and the future viability of them. As such, businesses might be increasingly relying upon the more advisory departments, such as competition, to see how their business might fare in the varying different outcomes that seem reasonably possible at this stage. Despite the lack of deal-making, businesses will need to calculate their best courses of action to mitigate risks that might arise from Brexit and to safeguard their future operations too.</p><p></p><p></p><p></p><p><strong><u>2. Weak EU Economic Growth (by [USER=118]@Sara[/USER])</u></strong></p><p></p><p><strong>The story:</strong></p><p></p><p>Last Friday, the Eurozone Composite Purchasing Managers’ Index fell to 51.3 from 51.9 in February. The index for manufacturing specifically fell to 47.7 in March, from 49.9 in February. The Purchasing Managers’ Index (PMI), according to Investopedia, is ‘an indicator of economic health for the manufacturing and service sectors’. Each country’s PMI is based on the survey of senior purchasing executives at over 400 companies. The index provides ‘information about current business conditions to company decision makers, analysts and purchasing managers’.</p><p></p><p>The Eurozone’s PMI this month marked one of the worst readings in the last five years, although it barely managed to stay above the 50 mark, which separates economic expansion from contraction. In other words, where a country’s PMI falls below 50, its economy has shrunk rather than grown.</p><p></p><p>One of the countries that failed to maintain the 50-threshold was Germany, the Eurozone’s largest economy, which saw its PMI for the manufacturing sector fell to 44.6 in March, from 47.6 in February. This was the lowest in 79 months. Also, France, the Eurozone’s second-biggest economy, saw its PMI fell to 48.7 in March from 50.4 in February, which was below the 50.7 forecast by economists in a Reuters poll.</p><p></p><p><strong>Impact on businesses and law firms:</strong></p><p></p><p>PMI is a crucial index because it is seen as an early warning sign of economic slowdown. The weak industrial output in the Eurozone signed a potential global recession and led to falling in Dow Jones Industrial Average on the same day by 1.8%. Dow Jones Industrial Average is a stock market index which measures the daily stock price movements of 30 large publicly-owned US companies. This was the worst performance of the index in over three months. The news of the weak manufacturing in Germany, which is seen as ‘the powerhouse of Europe’ must have concerned investors.</p><p></p><p>There are various factors that have led to weak economic growth in the EU. Most important among them was firstly, Brexit uncertainties, which must have had an impact in the zone, both on consumers and on manufacturers. Secondly, the US-China trade war contributed to a fall in demand for exports. China’s economic slowdown, which partly resulted from the war, has particularly hit Germany hard because Germany’s manufacturing sector heavily relies on exports to China.</p><p></p><p>Given the weak PMI, in the upcoming future, we are likely to hear about businesses suffering from fall in their sales and weak market condition deterring investors. Whether the US and China reach a trade deal will be the utmost important issue to many businesses because this can change the global economic climate by helping China to get out of an economic slowdown. For law firms, the possible global recession may mean demand for insolvency and restructuring from poor performing businesses.</p></blockquote><p></p>
[QUOTE="Abstruser, post: 10501, member: 260"] [B][U]Commercial Awareness Update - 27th March 2019[/U][/B] Hi everyone, The topics covered in this week's update are: [LIST=1] [*]Brexit update [*]Weak EU economic growth [*]Big Tech: Google vs EU [/LIST] As always, please feel free to share your thoughts and comments below. Happy reading :) [B][U]1. Brexit update (by [USER=1160]@Alice G[/USER])[/U][/B] [B]The story:[/B] Despite the turbulence of the last couple of weeks in Parliament, Brexit does not appear to be any more certain. Two points of significance have come to fruition in the last week. The first is the petition to revoke Article 50. At the time of writing, the petition has been signed 5,741,638 times. Despite the great number of signatories, Theresa May has ardently stated that this is not something she would be prepared to entertain under her leadership. This isn’t too surprising given the groundwork that the Prime Minister has put into her own deal and it is highly unlikely that any leader would revoke Article 50 without exhausting all other means to reach a solution. However, what this petition does demonstrate is the exercise of democracy amongst the British people. It arguably shows the desire for people to be more actively engaged in this process which might well spur a greater call for a second referendum, the ‘People’s Vote’, to allow people that chance to have their say. (Interestingly, the Great Debaters Club have proposed the following ‘Is The Revoke Article 50 Petition Pointless?’ for their next debate.) The second is the People’s March which took place on Saturday 25th March. Although the number of participants is debated, there was indeed a significant turnout of people. There was a great number of people attending the march who were not of legal voting age back in 2016, arguing that they deserve the right to vote on Brexit which will ultimately determine the nature of their futures. May is still hoping to get the backing for her deal in a third vote. Jacob Rees-Mogg has indicated that he might consider backing the deal but the DUP still state they would prefer a year long delay over the proposed deal. If May cannot get the backing she needs to meet the agreed extension (22nd May) then she will need to return to Brussels on 12th April with alternative plans. MPs also voted to be allowed indicative votes to indicate where they think the Brexit process ought to go next. Theresa May has said she may not abide by the desire for indicative votes. [B]Impact on law firms and businesses:[/B] There is daily uncertainty in Parliament which is never good news for the business world. M&A activity and transactional departments will be suffering from this uncertainty because of the way it stifles investments and deals. During bouts of uncertainty, it is hard for businesses to appraise the risks, benefits and likelihoods of potential deals and the future viability of them. As such, businesses might be increasingly relying upon the more advisory departments, such as competition, to see how their business might fare in the varying different outcomes that seem reasonably possible at this stage. Despite the lack of deal-making, businesses will need to calculate their best courses of action to mitigate risks that might arise from Brexit and to safeguard their future operations too. [B][U]2. Weak EU Economic Growth (by [USER=118]@Sara[/USER])[/U][/B] [B]The story:[/B] Last Friday, the Eurozone Composite Purchasing Managers’ Index fell to 51.3 from 51.9 in February. The index for manufacturing specifically fell to 47.7 in March, from 49.9 in February. The Purchasing Managers’ Index (PMI), according to Investopedia, is ‘an indicator of economic health for the manufacturing and service sectors’. Each country’s PMI is based on the survey of senior purchasing executives at over 400 companies. The index provides ‘information about current business conditions to company decision makers, analysts and purchasing managers’. The Eurozone’s PMI this month marked one of the worst readings in the last five years, although it barely managed to stay above the 50 mark, which separates economic expansion from contraction. In other words, where a country’s PMI falls below 50, its economy has shrunk rather than grown. One of the countries that failed to maintain the 50-threshold was Germany, the Eurozone’s largest economy, which saw its PMI for the manufacturing sector fell to 44.6 in March, from 47.6 in February. This was the lowest in 79 months. Also, France, the Eurozone’s second-biggest economy, saw its PMI fell to 48.7 in March from 50.4 in February, which was below the 50.7 forecast by economists in a Reuters poll. [B]Impact on businesses and law firms:[/B] PMI is a crucial index because it is seen as an early warning sign of economic slowdown. The weak industrial output in the Eurozone signed a potential global recession and led to falling in Dow Jones Industrial Average on the same day by 1.8%. Dow Jones Industrial Average is a stock market index which measures the daily stock price movements of 30 large publicly-owned US companies. This was the worst performance of the index in over three months. The news of the weak manufacturing in Germany, which is seen as ‘the powerhouse of Europe’ must have concerned investors. There are various factors that have led to weak economic growth in the EU. Most important among them was firstly, Brexit uncertainties, which must have had an impact in the zone, both on consumers and on manufacturers. Secondly, the US-China trade war contributed to a fall in demand for exports. China’s economic slowdown, which partly resulted from the war, has particularly hit Germany hard because Germany’s manufacturing sector heavily relies on exports to China. Given the weak PMI, in the upcoming future, we are likely to hear about businesses suffering from fall in their sales and weak market condition deterring investors. Whether the US and China reach a trade deal will be the utmost important issue to many businesses because this can change the global economic climate by helping China to get out of an economic slowdown. For law firms, the possible global recession may mean demand for insolvency and restructuring from poor performing businesses. [/QUOTE]
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