Impeach me and the stock market gets it. There were unmistakable echoes of a mob boss in a gangster movie when Donald Trump insisted that any such action against him would bring an abrupt end to what is now the longest bull market in history.

It is a sign of a backs-to-the-wall mentality at the White House that Trump felt the need to lash out in this way. Presidents usually go out of their way to avoid saying anything that might give Wall Street cause for concern. Not this one. The market would crash, Trump said. Everyone would be very poor.

The warning shows just how crucial Trump thinks a rising stock market is to his political appeal. You might not like me much, he is suggesting, but look what’s happened to your share portfolio since my election in November 2016.

What’s more, Trump is partly right. There is no doubt that a bitter impeachment battle – especially since it inevitably would be long drawn out – would rattle Wall Street. Financial markets hate uncertainty.

It is also the case that Trump’s agenda has helped to push up share prices. He has cut taxes on American corporations, which has boosted profits. He has also slashed regulation. Both are positive for markets. Trump campaigned as a man who would deliver for the little guy: he has governed in the interests of big business.

But all bull markets come to an end sooner or later, and there are already signs that the second 18 months of Trump’s presidency will be a choppier time for Wall Street than the first, impeachment or no impeachment. And if, as some believe, 2019 is a dire year for the stock market, Trump himself will have only himself to blame.

First, his tax cuts were ill-timed. They have pumped up demand late in the business cycle, raising concerns at the Federal Reserve, America’s central bank, that the economy is in danger of overheating. Trump’s crude attempts to pressurise the Fed into slowing the pace of interest rate increases will not work. The next increase in borrowing costs will happen next month, and eventually tighter borrowing costs will slow the economy, affecting corporate earnings.

The fact that the Fed has moved further and faster to normalise monetary policy has also led to a stronger dollar, and that affects the earnings that US companies make on their sales overseas. Trump seems to be setting up Jerome Powell, the chairman of the Fed, to be the fall guy if there is a market correction.

Secondly, there is Trump’s aggressive trade agenda, which is starting to affect the US economy in a number of ways. At the most basic level, tariffs push up the cost of imports, which add to business costs and so eat into corporate profit margins.

Tariffs also hurt other countries, and the reduction in global growth has a knock-on effect on US exports. The companies in the S&P 500 make 40% of their earnings outside America.

Then there’s the impact on business confidence. The psychological effects of protectionism were limited while US companies believed Trump’s belligerence was all an act. But as the rhetoric has hardened and sabre-rattling has threatened to turn into a full-scale trade war, businesses have become more and more alarmed. The risk is that Trump may use trade as a diversionary tactic in order to deflect attention from the investigations into his dealings.

Wall Street could continue to rise for a while. But by the start of next year the boost from tax cuts will be fading, interest rate increases will be starting to bite, the global economy will be slowing as a result of protectionism, and the midterm elections could result in a Congress much more hostile to Trump. The message to investors is clear: a big market correction is lurking out there. And it is not all that far away.

Oil Rigs in the Cromarty Firth awaiting decommissioning. Photograph: Jeff J Mitchell/Getty Images

Oil and gas can’t fuel Scottish independence

Higher oil prices have helped Scotland cut its deficit, giving Nicola Sturgeon, the country’s first minister, something to cheer last week.

The question of how much oil and gas revenues could power an independent Scotland was debated during the referendum campaign four years ago. On the face of it, the latest deficit numbers and North Sea’s mini-revival of four years of production growth, have strengthened the hand of Scottish nationalists.

The region’s firms have leaner operating costs after the oil price slump, smaller independent players are buying up fields to eke out the last hydrocarbons and crude prices are up.

But to focus on the short-term would be to miss the bigger picture.

The North Sea’s renaissance is coming to an end, with production expected to resume its trajectory of long-term decline next year.

Oil and gas output is projected to fall nearly a fifth in five years, to 1.38 million barrels of oil equivalent a day. After 2023, production is expected to decline 5% a year. Those are the projections of a boosterish regulator, not Greenpeace. The reality could be worse.

Declining production is not the only issue. Oil prices might look bullish due to the geopolitics of today, but there are bearish elements too – Opec is pumping more and the US will eventually clear bottlenecks in shale regions. Crude prices are impossible to predict.

Then there is the cost of cleaning up old rigs, a burden that falls on taxpayers to a certain extent because of tax relief. The government could also increase its tax take from the sector, a prospect that prompted apocalyptic warnings from the industry regulator.

There are many strong arguments for why an independent Scotland could succeed. North Sea oil and gas revenues are unlikely to among them.

Daniel Craig as James Bond in Skyfall. Photograph: Sony

Even 007 has to work hard to keep Hollywood happy



In Hollywood, creative risk is always balanced against the necessity of a decent box office return. Even a character as cavalier as James Bond would appreciate that. And that no doubt was one of the factors behind Danny Boyle’s decision to quit as director of the 25th 007 film, although the producers cited “creative differences”.

The James Bond franchise is a dependable hit machine for Hollywood in an era when, thanks to the rise of Netflix and YouTube, just foisting a big film and a large marketing budget on the public is no guarantee of ticket sales.

But figures for the last entry in the Bond series, Spectre, show that 007 has to work very hard to generate a decent return on a big-budget investment. Spectre cost $245m (£190m) and made $880m at the global box office. According to film website Deadline, the breakdown of revenue share from the film saw the Broccoli family – which owns the copyright to Bond on screen – take $50m, with about $10m for Ian Fleming’s estate and a total pay deal of around $11m for actor Daniel Craig (of which around $7m was upfront anyway). This left a net profit of $98m for the film’s distributors, Sony and MGM, who split the cost of the budget 50/50.

On those numbers it is evident that Spectre, a big and brash blockbuster, needed a big box-office performance to leave its backers satisfied. As Deadline said: “Anyone taking on the 007 property will be looking at working very hard for comparably small profits, when all the splits and payouts are factored in.”

The Broccolis and the new film’s distributors need the next Bond to hit Spectre-style numbers. In that context, Boyle’s reportedly radical pitch for the franchise – with more topical themes than usual and a Russian villain – was always in danger of being in the ejector seat.