Trump-ed up
New dawn
The exceptionally divisive and rhetoric-fuelled US election campaign crescendoed with Republican candidate Donald Trump sweeping to office. Mr Trump had secured 278 electoral college votes at the time of going to press, just over the 270 needed to win. The predicted comprehensive wild market swings were not entirely correct as gains in some safe havens were pared after the initial shock moved assets such as the Mexican peso and Japanese stocks down (see page 9 for more). Mr Trump should be pro-business and could lower taxes, particularly levies which make it extremely punitive for US companies to repatriate cash earned overseas back home.
Growth cools
Inflation spectre
The latest blow-by-blow account of post-referendum UK growth showed economic growth had moderated marginally to 0.4 per cent for the three months to October, according to National Institute of Economic and Social Research (Niesr) estimates. The body said consumers continued to spend but warned rising inflation, which could be fuelled if the pound remains weak thus pushing up the cost of imports, could hamper this driver of economic growth. Inflation jumped sharply to 1 per cent and Niesr predicts it could hit 4 per cent next year.
Mountain erosion
Toblerone alteration
It might seem like another overblown reaction to the change of a relatively unimportant part of life. But just after the recent frenzied furore over price hikes on Marmite, Mondelez International has altered the shape of the iconic Toblerone bar to reduce its size. The move is in response to rising costs, which have been pushed up by the weak pound. Two Toblerone products now have fewer peaks and wider troughs to reduce the weight of the bar without changing the packaging. Walkers and Birds Eye have also said they're set to raise prices, suggesting a consumer squeeze is on the way.
RBS coughs up
Business compensation
The majority taxpayer-owned bank RBS has said it will set aside £400m in potential compensation for fees its global restructuring group (GRG) charged small businesses who had found themselves in financial hardship. The bank had been criticised for moving companies it had lent money to into the GRG between 2008-2013. The FCA has been investigating the bank on this issue but has been working with the bank to provide a solution. The £400m was agreed with the regulator, which said RBS had not artificially engineered borrowers to be put into the GRG.
Not so sweet home
London prices drop
The price of land for residential development in central London dropped by 8.9 per cent in the past six months - the largest fall since 2008. The move lower comes in the wake of the UK's vote to leave the EU, which has created significant uncertainty in markets. Savills, which released the data, said the drop in residential land prices in the past year was now 10.2 per cent. Office development land also fared badly, dropping 5.9 per cent in the past six months. Savills said worries among some developers had reduced the number of bids for each site, meaning prices were likely to be bid up less.
Apple cash
Ireland to appeal
A landmark decision by competition authorities in Brussels to force US tech giant Apple to pay €13bn (£11.6bn) in back taxes to Ireland will be appealed by the country. Irish finance minister Michael Noonan said his government would appeal the decision ahead of this week's deadline and take the case to the European courts. There was some reticence among some Irish politicians about this stance initially, but an agreement has been reached to defend its low tax regime which encourages significant amounts of foreign investment.
Investment stable
UK businesses calm
Business investment in Britain will remain largely stable during the next year, according to a Bank of England survey. The central bank's latest agents' survey, conducted between late August and mid-October, suggested "broadly stable or slightly lower investment spending". It also warned the private sector was set to face rising cost inflation if the weakness in the pound persists. Construction and financial services sectors were the most subdued in terms of investment expectations while manufacturing and consumer-facing businesses suggested their investment would remain flat.
It’s tough to ascribe a value to global brands such as Apple (US:AAPL) and Facebook (US:FB). Sir Martin Sorrell, the boss of advertising titan WPP (WPP), has tried to do just that by tracking the share price performance of the owners of top brands over the past decade. “Investing in innovation and branding clearly pays off in the short and long-term,” he wrote in his commentary on WPP’s recent third-quarter results. “If we had invested equally over the past 10 years in the top 10 most highly valued brands in our annual top 100 global brands survey... we would have outperformed the S&P 500 by over 70 per cent and the MSCI by approximately four times.”
The chart shows the share price performance of some of the top 10 global brands listed in the survey over the past decade. On average, they’ve significantly outperformed the S&P 500. With Amazon (AMZN) and Apple doing most of the heavy lifting.
