TODAY’S FAYRE – Friday, 18th July 2014
“A limb has fallen from the family tree.
I keep hearing a voice that says, “Grieve not for me.”
Remember the best times, the laughter, the song.
The good life I lived while I was strong.
Continue my heritage, I’m counting on you.
Keep smiling and surely the sun will shine through.
My mind is at ease, my soul is at rest.
Remembering all, how I truly was blessed.
Continue traditions, no matter how small.
Go on with your life, don’t worry about falls
I miss you all dearly, so keep up your chin.
Until the day comes we’re together again.”
As with every decent person on the planet our hearts and thoughts go out to those poor unsuspecting people who were recklessly and inhumanely blown out of the sky, whilst in the prime of their lives and of course our deepest sympathies to their grieving families – such mindless barbarism!
You decide to take a day off and visit Mecca in NW8 for a day’s absorbing test cricket and all hell breaks loose! Hostilities in Gaza escalate and then at about 2.30pm some ‘brain-dead’ maniac pulls the trigger of a missile launcher, which shoots down a Malaysian airliner with 295 people on board over Eastern Ukraine. We wait for confirmation as to who was the perpetrator – probably a pro-Russian separatist fighting in Ukraine, but sadly the incident has the blood of those murdered all over President Putin’s hands for providing the weapons capability! However Putin may be a ruthless dictator, who eats nails for breakfast and spits rust out, but he’s not a fool and will surely have been unaware of the perpetrators’ intention.
Whether this act of barbarism can at last make good sense prevail in the region remains to be seen, but the ramifications – both politically and economically – are far reaching, if there is impasse. President Obama, after what appeared to onlookers to have been rather a barren and anemic period for him in terms of any effective foreign policy initiatives, yesterday imposed quite tough sanctions on Russia, in comparison to previous US efforts. These are likely to become even tougher as a result of this act of barbarism. The World needs to know – Why? Who? How? And what is going to be done to bring the perpetrators to justice. Frankly the EU’s response to Russia before yesterday’s outrage, have been pragmatically wet. So there can only be some improvement in its response.
How damaging will it be to the economic recovery? Initially oil prices have shot up. Companies involved in doing business in or with Russia will suffer – BP, Exxon Mobil, McDonald’s, drug companies, breweries and tobacco manufacturers. Temporarily we may need to be fearful in the UK for energy operators such as Centrica and BG group, in case gas supplies suffer. The banking sector is also likely to come under the cosh, as many of Europe’s banks have close financial ties with significant lending to Russian business. It might be folly to play down the significance of such an outrageous act of international aggression, but in the grand scheme of life, though business scars will have been implemented, they may not be indelible in a few months’ time.
Markets were getting over economic issues, interpreting the FED’s Janet Yellen’s assessment of the US economy and concern over stock market valuations. Employment and inflation data was being put to bed here in Old Blighty. Stocks across the world were beginning to have a bit of a run on the rails. The US 2nd quarter earnings season had few disappointments and there was another HUGE M&A deal to ruminate over – Murdoch’s 20th Century Fox’s audacious pop at Time Warner in an $80 billion deal, initially rejected out of hand. We, here in London, also pawed over the sale of the remaining 6.4% of BKSYB’S stake in ITV, which was sold to Liberty Media for about £480 million. Where does that leave ITV going forward?
Then wallop! The Street of Dreams not surprisingly reacted adversely to these international tensions with the DOW and S&P 500 losing about 1% and the NASDAQ 1.4%. Though revenues at IBM were lower, the outlook was bright. Google also reported numbers yesterday and saw revenues up 22% to $16 billion. The stock was up about 1.4% after hours. Microsoft shook the rafters of the NYSE by announcing that there will be about 18,000 redundancies in the next few months. These moves could well have a damaging effect on Nokia’s recovery. In the past year MSFT’s share price has rallied by 20%. Alibaba much awaited $20 billion IPO also served notice that this sale would not take place until September to avoid holiday inertia. Today BONY, HONEYWELL and GE post interim results. The FTSE 100 was down 36 points at 6738 and is likely to fall another 25 points this morning. Asia had a negative session with the NIKKEI easier by 1.1% at 6.00am, though Shanghai was up 0.4%. The Russian Exchange was 1.6% easier in early skirmishes this morning. I was amused to hear the ‘wittering’ of Dr Cable exhorting Williams & Glyn to get cracking and open its 430 branches. Guv’nor, its presence on the high street won’t make that much difference.
These are David Buik personal views
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