Daily Brief – News Overload

News Overload

In the last days it has at times felt overwhelming given the plethora of Trump announcements and the less than credible attempts by his coterie of officials to explain or even more ambitiously, to justify the illiterate economic reasoning behind it all. Take Jonathan Ferro on Bloomberg, whose eyebrows nearly disappeared into the top of his head when listening to the Chair of Economic Advisors of the United States yesterday lunchtime, as Stephen Miran tried to explain the link between the absolute level of the tariffs and the trade deficit. They are different things, Ferro pointed out.

EUR/USD 1.0960.

European Corporate Exposure

If you are wondering why the EU markets are selling off so markedly other than the obvious i.e. the absolute level of the 20% US tariffs imposed on their export goods to the USA, look no further than this fact: in 2013 European companies had 20% of their assets located in the US but now have 30%. North America is the biggest single exposure for European firms bigger than the UK, Germany and China combined. Companies in the Euro STOXX 600 Index generate 26% of their revenues from North America. So this is a double whammy: tariffs on those companies’ goods plus crumbling revenues due to a weaker USD. For example, Netherlands company Ahold Delhaize generates 60% of its revenues from the USA, Britain’s Ashtead Group has 70%, Fresenius Medical Group, Bunzl, Compass Group, Pearson, Experian, InterContinental Hotel Group, Rentokil Initial and the list goes on.

GBP/USD 1.2790.

Rome’s Colosseum

Hats off (finally) to Italy for fining ticketing agencies EUR 20 million for making it well nigh impossible to buy standard price tickets for Rome’s Colosseum. With 12.3 million visitors annually, it has been a nice scam for the touts who have been marking up entry dramatically from the official EUR18 price by offering extras, such as skip the line and guides.

EUR/GBP 0.8569.

Madonna and Elton John

As is generally known they have carried out a feud for the past 20 years with Elton slinging most of the mud accusing Madonna of miming to her songs and being unable to sing among other more ungentlemanly insults. Despite those slurs, Madonna made the running on Saturday night last weekend by confronting Elton. Immediately Elton John folded faster than a piece of origami asking her to “Forgive Me”. Not a dry eye in the house.

USD/JPY 146.75.

Let’s Dance

This day in 1983-can it really be 42 years ago? – David Bowie had a Number One with this number produced by Niles Rogers as yet another example of the chameleon-like Bowie re-inventing himself as musical tastes changed over his long career. It all goes to show however that you can take the boy out of Brixton but you can’t take Brixton out of a South London boy!

Let’s dance
Put on your red shoes and dance the blues
Let’s dance
To the song they’re playin’ on the radio

Let’s sway
While colour lights up your face
Let’s sway
Sway through the crowd to an empty space

If you say run
I’ll run with you
And if you say hide
We’ll hide
Because my love for you
Would break my heart in two
If you should fall into my arms
And tremble like a flower

Discussion and Analysis by Humphrey Percy, Chairman and Founder

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