AdSlot 1 (Leaderboard)

MARKETS & DATA – US falls prey to second thoughts.

UK stockmarket[QQ] In line with most other equity markets, the UK has not been completely insulated from recent weakness on Wall Street, but there is little sign of a flight to safety. As optimism about UK and global growth increases, small companies have continued to outperform the FTSE-100 and the best returns have come from cyclical rather than defensive sectors. Overseas equities The strength of second quarter profits in the US pushed the S&P Composite to yet another record level in the middle of July, but the impact of these results was soon overwhelmed by fears of higher interest rates. The market suffered a 10% correction as a raft of economic data indicated little sign of moderation in the pace of economic growth. Interest rates As economic recovery gathers pace, there is an increasing consensus that UK rates have reached a trough, and forecasts of the levels they may reach next year have been nudged higher. Indeed, worse than expected average earnings figures and some hawkish comments in a Bank of England report have led to some speculation that the first interest rate rise may be imminent. Exchange rates Despite the prospect of higher interest rates in the US, the dollar has been under some pressure against both the yen and the euro in recent weeks. Investors appear to be giving greater weight to a perceived improvement in the economic outlook for Japan and Europe, at the same time as the Federal Reserve seems determined to cool the US boom. Market data supplied by Britannia Asset Management Ltd. Tel. (0141) 248 2000. Expressions of opinion contained within this document are subject to change. Britannia Asset Management Ltd is the holding company of Britannia Investment Managers Ltd (Regulated by IMRO). Yield curves: Bloomberg; others: Primark Datastream.

 Surveyor: Odd jobs, capital cities and euro-nly live twice Fat cats and other job titles Proportion of trained chartered accountants with first class or upper second class degrees                                         78% Year-on-year decrease in Q2 recruitment demand for senior executives                                                            17% Estimated number of manufacturing jobs to be lost in the next 18 months                                                         160,000 Proportion of HR directors who would rehire less than 60% of their current employees                                            50% Source: ICAEW; MSL Search and Selection; Institute for Manufacturing; DDI  London calling Proportion of international trade in OTC derivatives conducted in London (1998)                                                      36% Financial services employees in London                            210,000 Proportion of UK companies making Q2 profit warnings that are based in London                                                       51% Number of cities in Europe and US where office space is more expensive than London                                                   0 Increase in average value of "weekend country properties", June 1997 to July 1999                                                30% Source: BI; Ernst & Young; Richard Ellis St Quintin; Paragon Mortgages  Euro: jury still out? Proportion of CBI members in favour of joining EMU                    52% Proportion of small business managers unwilling to use the euro under any circumstances                                               12% Ditto who were unable to say exactly what EMU is                      70% Proportion of UK exporters who think they'll never use the euro       11% Source: CBI; Allied Irish Bank; NCM

Financial Director books offer – Readers of Financial Director may order any of the John Wiley/PricewaterhouseCoopers books reviewed on page 13 in a special offer: “Buy one, get another of up to equal value for half price”. Cheques should be made payable to John Wiley & Sons Ltd and sent to John Wiley & Sons Ltd, 1 Oldlands Way, Bognor Regis, West Sussex, PO22 9SA. For credit card orders, please telephone 01243 843 294 or e-mail

 The prices of the books are: Five Frogs on a Log                  £24.95 Waltzing with the Raptors            £18.50 CFO: Architect of the corporation    £19.99 Action Management                    £18.50 Shared Services                      £38.95 Postage & packaging: £2.95 per order. NB: Please quote Financial Director with your order!

– In a separate offer, Mars Business Associates, publisher of The Dynamics of Shareholder Value, have made that book available at a special discounted price of just £20 (p&p free), reduced from £29. Send your order to: John Robertson, Mars Business Associates, 62 Kingsmead, Lechlade, Glos, GL7 3BW or e-mail (Sorry, no credit cards.) Again, please quote Financial Director when placing your order!

Related reading