Calorific….
All the excitement in the markets and global stage, what with China’s Shanghai index now actually doubling for the year (buoyed by the year’s largest IPO expected in a few days, index actually returning +103.51%!), UK shrugging off worse than expected economic contraction numbers, the rise in infected sufferers of swiftly-spreading-swine-flu (the initial “over-reaction” was indeed justified), as well as the latest pleasing developments in the Middle East and its elusive search for peace, all appear to have created a little too much excitement for Sarkozy to bare. France’s President fainted with disappointment at not being credited for either the economic recovery or signs of progress in the Levant, despite his energetic attempts to place himself at the centre podium of the world-stage. Okay, it was actually during one of his rigorous runs – a young wife will do that to an ageing man.
I’m not sure if it has anything to do with his collapse, but a report today exposed Starbucks for having a so-called “frozen coffee” that contains close to 571 calories – that’s like having a Big Mac and fries for lunch – now of course, in France it’s known as “Le Big Mac” – and when you consider the fact that there are no Starbucks outlets in France, the finger must be pointed at the great US fast-food chain – how “freedom fries” ironic.
Mid-East Peace… The Middle East is in a state of excited anticipation as the special US envoy jets around following Obama’s watershed speech in Cairo back in June – several visits with the once-shunned - but always considered a great potential Western facilitator - Bashar Assad, a little apparent pressure on the Israelis to cease their settlement expansion against UN wishes, and we are now facing a very viable solution to the near-60yr problem faced by those living in the Levant – peace.
Of course, Syria signing peace with Israel, and more so Lebanon signing peace with its southern neighbour is a rather more difficult notion to put into practice than putting pen-to-paper, as only the Oslo accords too painfully taught us. Nevertheless, the very fact that Obama’s administration is close to starting the conversation in all seriousness is testament to the energy and advantage-taking of the wind-of-change flowing through the region since the globally-loved US President came to office.
Now, the solution to what is essentially an age-old programme will not be easy and no-one is of course expecting it all to take place within a week, but the positive overtures being made by all parties, and the return of a US-Ambassador to Syria, only further isolates Iran in the region and amplifies the differences between those willing to put long-standing animosities aside in the name of a lasting solution for the greater good of the people and a brighter future for all. Israel’s role here is naturally the most crucial aspect. We’ll discuss this in more detail as the week, and developments in the Mid-East discussions, progresses.
…pleasantly peaceful markets...
Good timing on the meeting with the US’s banker, as China’s huge reserves may come into question again when the credit-card crisis that is now gaining momentum in the press (first few articles appearing in the FT and Economist over the weekend) hits for real later in the year. Following last week’s look at the US + China relationship, today sees the start of the long-awaited “strategic discussion” between the two, as they seek to maintain the momentum created through the energetic policies already responsible for the impressive (but for how long) return to form of global markets. Even the S&P500 is now returning 8.4% YTD, with the tech-heavy Nasdaq +24.6%.
Gold has started to flirt once more with the $70/brl level, although some here believe it is a reversal of trades put on a month-back when the rogue trade distorted the market – whatever the reason may be, it has certainly helped the Mid-East markets post their best performance in a month.
Cheap-as-chips…
One of the more macro indicators some fund managers like to monitor (apart from our favourite BDIY – which has been falling for the last 5 days), is the Chip-Manufacturing Index. South-East Asia is of course the primary market here, and if they are producing more chips, that means Apple and Intel are asking them to produce more chips, which means they are feeling more confident about tech-sales, which means consumers are spending disposable income on high-priced tech-goods, which should mean that people are actually making money again and feeling confident enough to buy expensive tech goods, right? Well actually…no, wrong.
You see, it all comes back to the human emotion factor again. There have been studies conducted to determine just exactly how long the average individual can veer away from their usual course of lifestyle – the average duration is 18mths. This would lead to the suggestion that just as many look to the “lip-stick index” (apparently women purchase more lip-stick during recessions to make themselves feel better with a relatively inexpensive purchase) the chip-manufacturing index may only be reflecting an “enough-is-enough” reaction from some and explain why the likes of Apple and other classy “must-have” high-tech goods producers are experiencing bumper sales.
For some it seems, nothing makes them feel better than brandishing the latest I-Phone 3GS and flashing it about in the local downtown Starbucks, as they sip on a 571-calorie iced-coffee watching the plain-clothed-ex-banker sitting in the corner e-mailing his CV out on the free in-store WI-FI.
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