Global equity investors started the week with a spring in their step, as Emmanuel Macron’s victory in Sunday’s final round of the French presidential election settled nerves in the Eurozone. But the defeat of Marine Le Pen had been widely expected, and Macron may well face difficulties in implementing his policy programme, given the extreme youth of his En Marche! movement and the widespread opposition to his proposed economic reforms. Investors were soon in more sober mood: the FTSE World European (ex UK) index was down -0.4 % by Thursday’s close.
Poll taxes patience
In the UK, meanwhile, the headlines were inevitably dominated by the looming election. The constant repetition of campaign soundbites – “strong and stable”, “coalition of chaos” and “for the many, not the few” – probably caused more ennui than elation.
But the clichés were accompanied by plenty of minor excitements – from Theresa May’s support for fox-hunting to the running over of a BBC cameraman by Jeremy Corbyn’s car to the leaking of the Labour Manifesto. Then there was the revelation that LibDem leader Tim Farron once had a poster of Margaret Thatcher on his bedroom wall. Mrs and Mr May’s appearance on the One Show sofa caused less of a buzz, with “steady” and “uneasy” among the kinder adjectives applied.
Amid all the political hurly-burly, the Bank of England offered some strength, or at least stability, of its own. The Monetary Policy Committee voted 7:1 to leave interest rates unchanged and revised down its prediction of full-year economic growth only slightly, from 2% to 1.9%.
In the equity market, BT attracted some dismal headlines, after it announced 4,000 job losses and a pay cut for chief executive Gavin Patterson. This follows an accounting scandal, missed targets in its global business and misstated profits at its Italian operation. Other FTSE 100 constituents did better, however; the index up 1.2% at Thursday’s close. Pharmaceuticals stocks were in rude health, with both AstraZeneca and GlaxoSmithKline up strongly over the week.
Trump cards Comey
The week’s biggest political surprise came from across the pond, where Donald Trump’s firing of FBI chief James Comey sparked considerable outrage from both Democrats and Republicans. The move prompted comparisons with Richard Nixon, who fired an FBI official who was leading an investigation into his conduct. Comey was heading the FBI’s probe into Russian interference in the US election.
In the markets, the dollar weakened in response to Comey’s dismissal. The S&P 500 had hit yet another record high at the start of the week, but fell back thereafter to end down 0.2% by Thursday’s close. The tech-dominated NASDAQ had a good week, however, also hitting a record high and ending up 0.25%.
Apple phones it in
The NASDAQ’s gains came as Apple exceeded US$800 billion in market capitalisation – making it the largest company ever. Apple’s market cap is now larger than the nominal GDP of the Netherlands.
The latest surge in Apple’s shares is explained by excitement about the forthcoming iPhone 8. With the iPhone’s 10-year anniversary approaching, investors hope that Apple will pull something special out of the bag to mark the occasion. Already, there are rumours of 3D facial-recognition systems, paired cameras and free AirPods to keep the tech geeks drooling.
And finally …
Attention all brunchers and hipsters (you know who you are)! After tennis elbow, housemaid’s knee and iPad thumb, the latest self-inflicted harm our species faces is – wait for it – avocado hand.
Unlike the others, this new domestic danger is not a repetitive strain injury, but something much more acute. According to the British Association of Plastic, Reconstructive and Aesthetic Surgeons (BAPRAS), avocado enthusiasts are maiming themselves in significant numbers as they attempt to remove the fleshy pear’s hard kernel with a knife. Simon Eccles, BAPRAS’ secretary, says that people fail to appreciate the ripeness of the fruit and “there is minimal understanding of how to handle them”.
Given the popularity of smashed avocado on toast among the brunching community, BAPRAS is calling for the green menace to carry safety stickers. Mr Eccles says that he treats four people a week for avocado-related injuries. Other concerned parties include Jamie Oliver, who highlighted the dangers in a YouTube video, and Meryl Streep, who was forced to do a press conference with a bandaged hand.
The rest of us might be best served by letting someone else prepare our guacamole. Or sticking to beans on toast.
