Monday, October 09: So what’s changed since we last spoke? Not a lot really…. England’s football team is still utterly hopeless and about as likely to win next year’s World Cup in Russia as Leicester are to win a Premier League titl…. but really, back in the real world it’s not going to happen. Investing in the current climate is extremely tricky, advice equally as complex to give, but betting on anybody but England next summer is the safest investment in the British economy right now*. Moving on, Spanish tensions continue to drive the news feeds across Europe. With Catalonia set to go ahead with independence, and to be honest, nobody at all knowing what this will mean or how this will happen. What we do know is Spain (and Europe) are at a tentative crossroads. I’ll sum up the Catalonia dilemma as best I can; Catalonia feel like they don’t need Spain, so as every 7 year old did at one point. They pack the necessities (handful of biscuits, toy gun for safety, a coat for a football goal not for practical use) and plan their break to freedom. Nobody knows where this will take them, what it will mean, who it will impact. But they’re going and nothing, not even that lamppost barrier will stop them. There was also a small ripple on the Trump and North Korea water, after Donald just decided to tweet impending vague war threats on Saturday morning. Somebody please tell him about Saturday Morning Kitchen! To quote part of his 140 character warhead;
‘Sorry, but only one thing will work!’. Somehow I feel like ongoing political discussions and negotiating fair terms for both parties isn’t that one thing.
To the markets; amidst the political rumbles that markets have built up a certain resilience to these days, there was little in the way of driving forces for investors to digest this morning. The US jobs figures that came out on Friday were seen as a bit of a write-off following the tragic natural disasters that have put an estimated 1.4 million people out of work. At the European open, the FTSE was held from a small recovery in the pound, after last week’s gradual decline. Sterling picked up strength through the day and the FTSE closed 0.2% lower. There were no huge movers across the indices with again a lack of news flow to blame. Smith & Nephew shares fell after they announced their CEO would be departing, Millennium & Copthorne shares did buck the trend and add some excitement to Monday, surging 23% (FTSE 250) after Singapore’s City Developments offered to purchase the remaining c.35% of shares it did not already own. In further company news, the Wood Group merger was finally completed today after pleasing the CMA. AMEC Foster Wheeler will sell the majority of their UK North Sea business to allow the deal to finally complete. Shares in Wood Group closed 1% down. BAE Systems look set to get rid of 1,000 jobs, citing worries around future demand linked to their Eurofighter Typhoon jet. The cuts will mainly affect their Lancashire plants. Shares finished the day +0.9%.
*losses may exceed initial investments in hope, pride and patriotism.