Daily Brief – France

France

Beyond its political woes, which were somewhat mitigated by the appointment of President Macron’s latest PM on Wednesday, France is looking down the barrel of a likely credit downgrade that will see it losing its AA status. This will further constrain growth as well as increase its cost of borrowing. Just to round things off, the necessary fiscal measures that saw off previous PM Francois Bayrou will just become ever more inevitable despite the marked reluctance of France’s electorate to confront la verite never mind l’actualite.

EUR/USD 1.1693.

UK Coffee and Sandwiches to go

Post Covid it seemed that shops like Pret and Costa could continue to raise prices without fear that their customers would stop paying. 3 years later that has all changed. Pret owner JAB marked down the value of its investment by 30% this week as office workers have woken up to the fact that a sandwich and a coffee for a tenner represents poor value. Coca Cola which shelled out GBP4 billion for the Costa chain are looking for bids at GBP2 billion. Food costs, labour and business rents are all conspiring against the business ethos that has worked so well for decades: affordability.

GBP/USD 1.3520.

Oracle

This is not about Larry Ellison becoming the world’s richest man, although of course congrats are in order thanks to the AI surge of his Oracle shares that netted him USD 100 billion in less than an hour on Wednesday. That move prompted us to look at how tech shares had performed in the past 12 months. At the top of the Top 3 is Oracle at +70%, then Amazon at 39%, and Microsoft at 24%. Yesterday, that AI mania drove up Asian markets as investors scrambled to join in.

EUR/GBP 0.8650.

Picklesburgh

No need to reach for your World Atlas as Picklesburgh is not a place nor a state of mind but a food festival that takes place every year in July in the once industrial wasteland that is Pittsburgh Pennsylvania USA. More than 250,000 foodies attend, and it is becoming a draw for hen weekends and devotees of Eastern European, German, and Italian food which is a reflection of the original immigrant city fathers’ roots. BA will get UK readers there for GBP520 return and they will get the chance to try the most popular straw in the wide range of food and refreshment on offer: a Primanti Bros Sandwich, which is a thick pastrami or corned beef sandwich topped by French fries and coleslaw wrapped in newspaper.

EUR/JPY 172.82.

Man in Black

This day in 2003 singer songwriter not to mention hell raiser and all round character Johnny Cash departed this world and went to the big recording studio in the sky at the age of 71. This song is the one most closely associated with the legend that he undoubtedly was:

Well, you wonder why
I always dress in black
Why you never see
Bright colors on my back
And why does my appearance
Seem to have a somber tone?
Well, there’s a reason for the things
That I have on

I wear the black
For the poor and the beaten down
Livin’ in the hopeless
Hungry side of town
I wear it for the prisoner
Who has long paid for his crime
But is there because
He’s a victim of the times

I wear the black
For those who’ve never read
Or listened
To the words that Jesus said
About the road to happiness
Through love and charity
Why you’d think He’s talking
Straight to you and me

Well, we’re doin’ mighty fine
I do suppose
In our streak of lightnin’ cars
And fancy clothes
But just so we’re reminded
Of the ones who are held back
Up front there ought to be
A man in black

I wear it
For the sick and lonely old
For the reckless ones
Whose bad trip left them cold
I wear the black in mournin’
For the lives that could have been
Each week we lose
A hundred fine young men

And, I wear it
For the thousands who have died
Believin’ that the Lord
Was on their side
I wear it for another
Hundred thousand who have died
Believin’ that we all
Were on their side

Have a Great Weekend!

Discussion and Analysis by Humphrey Percy, Chairman and Founder

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