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Ken Griffin ‘Very Anxious’, Google May Have To Sell Chrome & Trump's Win Hits European Investors

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November 19, 2024

TLDR: Ken Griffin discusses concerns about Trump tariff policies, UK trade deals balanced with EU ties, European pooling of resources for defense and climate, antitrust action against Google, and Hong Kong sentence for democracy advocate Benny Tai.

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In this episode of Bloomberg Daybreak Europe, the hosts Caroline Hepka and Stephen Carroll discuss significant developments affecting the global economy, markets, and technology. The focus includes insights from hedge fund titan Ken Griffin regarding Donald Trump's tariff policies, implications for European markets, and the potential breakup of Google's Chrome browser, as well as current political tensions in Hong Kong.

Key Points of Discussion

Ken Griffin's Concerns About Trump's Tariff Policies

  • Economic Outlook: Ken Griffin expresses anxiety about how Trump's tariff policies could affect U.S. businesses in the long run. While tariffs might yield short-term profitability, they could hinder the global competitiveness of American companies.
  • Investor Sentiments: Griffin's remarks reflect a broader apprehension among financial leaders about the incoming administration's stance on trade, raising concerns over potential retaliation from European allies.

Impact on U.K.-EU Trade Relations

  • Trade Secretary's Stance: Jonathan Reynolds, U.K. Business and Trade Secretary, emphasizes the need to preserve the U.K.'s relationship with the EU while negotiating with the U.S., noting the importance of balancing trade ties.
  • Economic Data: Reports indicate that the U.S. is a crucial trading partner, with bilateral trade valued at over £300 billion, contrasting with the EU’s over £800 billion in trade with the U.K.

European Political and Economic Landscape

  • Christine Lagarde's Call for Unity: European Central Bank President Christine Lagarde urges EU nations to pool resources, particularly in defense and climate initiatives, to combat faltering productivity growth.
  • Rising Protectionism: Lagarde's warning reflects fears that Trump's return to the White House could initiate a new wave of protectionism in global markets.

DoJ's Antitrust Move Against Google

  • Historic Action: The U.S. Justice Department is reportedly aiming to compel Alphabet Inc. to divest its Chrome browser to address monopoly concerns. This initiative highlights growing scrutiny on big tech companies.
  • Implications for AI and Android: The potential breakup could also impose new regulations on Google's involvement in artificial intelligence and its Android operating system, which could reshape the tech landscape.

Tensions in Hong Kong

  • Judicial Actions: Hong Kong's courts sentenced democracy advocates, including Benny Tai, to extensive prison terms under a stringent national security law imposed by China, raising international condemnation regarding the suppression of dissent.

Market Reactions and Future Outlook

European Stocks and Currency Pressure

  • Stock Market Performance: Following the recent U.S. elections, European stocks displayed consistent retreat, exacerbated by fears surrounding potential tariffs and a fiscal policy shift under Trump's administration.
  • Investor Behavior: A 40% record low comparison between European equities and U.S. stocks signifies a drastic divergence in investment preferences, with many investors concerned about Europe’s growth prospects and geopolitical dynamics.

Euro's Decline Towards Parity

  • Currency Predictions: Analysts predict that the euro might near parity with the U.S. dollar, driven by expectations of increased tariffs from the U.S. impacting Europe's manufacturing-dependent economy.
  • Expert Insights: Major financial institutions believe that under the proposed tariff regime, Europe faces significant threats that could hamper its economic performance and elevate the euro's vulnerability.

Conclusion

This episode delves deep into financial leaders' anxieties surrounding upcoming U.S. policies under Trump's administration, the potential implications for European markets, and the urgent calls for collaboration within the EU. Furthermore, the scrutiny of big tech firms like Google highlights an evolving regulatory landscape that could reshape commerce and technology. As global markets react to these developments, investors may need to adopt a more cautious stance, weighing the challenges ahead against potential opportunities.

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