Stocks March On Despite Protests

Stocks March On Despite Protests

over 3 years ago3 mins

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Global stock markets continued to rise last week, even as mass protests against racial injustice across the US and elsewhere threatened to knock them off balance.

⏰ Recap

  • In 2018, Nike took a stand with a divisive ad in support of an American footballer protesting police brutality
  • Later that year, “gilets jaunes” protestors in France pushed the country to reduce its economic growth forecasts
  • Protests in Hong Kong last summer led to the withdrawal of a controversial new law
  • And last week, Nike and Adidas were among several high-profile brands that denounced racism

✍️ Connecting The Dots

Back when protestors took to the streets in France and Hong Kong, businesses were temporarily forced to shut: shopping for new things, after all, wasn’t exactly a priority when people believed their liberty was under threat. And the negative economic impact of that arguably furthered their cause, pushing authorities to put an end to the unrest.

One big difference in the Black Lives Matter protests is that it’s pretty hard to impact a global economy that’s already at a standstill. Even so, companies are sitting up and taking notice: Netflix, Nike, and Twitter – to name a few – have made their views clear, while Goldman Sachs has announced a $10 million fund to address racial and economic injustice, despite its own chequered history with African Americans. “Hold my beer,” said SoftBank, which proceeded to announce a $100 million fund to back businesses led by people of color.

Cynics might say companies are only making surface-level changes. But investors are uniquely positioned to help drive more meaningful institutional changes: they could force companies to share data on racial disparities in pay and leadership, in much the same way they’ve pushed companies to publish data on environmental and sustainability initiatives.

🥡 Takeaways

While investors focused on social responsibility and impact investing can effect change by buying or selling shares, non-investors can use their cash to make their voices heard too. By spending your money with companies that share your values and avoiding those that don’t, you’ll force the latter to shape up to win you over. The fashion industry’s a prime example of consumers’ ethical concerns translating into real, palpable change.

The stock market tends to reflect what’s expected to happen in the economy before it actually does, with a few unusual exceptions. Even then, it’s a reflection of the biggest companies in a given economy, and not necessarily a great representation of the economy as a whole – especially in countries reliant upon small- and medium-sized businesses for much of their growth.

🎯 Also On Our Radar

Warner Music’s initial public offering last week was, by all accounts, a hit. The record label – home to Lizzo, Dua Lipa and Ed Sheeran – raised almost $2 billion in the biggest US listing so far this year, which valued the company at $14 billion. And speaking of music and media, we spoke with the former CEO of MTV Europe about what he thinks is next for an industry in the throes of massive change. Find this new issue of The Boardroom in the Explore tab of your app.

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