China concern
Data gloom
Further data from China has added to concern that the emerging markets powerhouse is slowing down faster than its government desires. Just days after government officials said that they would aim to keep GDP growth above the 7 per cent level, the purchasing managers index reading for the manufacturing sector in July registered 47.7, down from 48.2 in June, with a reading of less than 50 indicating contraction. This is the worst reading for 11 months and, of further concern, new orders also contracted. This data will fuel calls for further stimulus measures from the Chinese government.
Irish housing hope
Green shoots
The moribund Irish property sector, which has been in the doldrums for five years, is showing signs of life at last. After recent talk of a bottom in the commercial property market there, with Ireland's first commercial property real estate investment trust recently setting out plans to float, the latest survey of residential prices in Ireland showed a 4.2 per cent rise in June compared with the same month last year. But one swallow does not make a summer, and Ireland's property crash was spectacularly bad so there is a long way to recovery.
Bentley boost
Job creation
Luxury car marque Bentley is the latest of its peer group to announce a shift into a new market segment with news this week that the German-owned manufacturer is to invest £800m into its UK plant to enable it to start producing a sports utility vehicle (SUV) -style Bentley. The move, which will create 1,000 jobs, will put Bentley in competition with the likes of Porsche's Cayenne and, probably, a new SUV from Jaguar after it also announced plans for a new range of cars. The investment in both these marques by their overseas owners, and the money pouring into their UK facilities, is a vote of confidence in the UK's auto engineering sector.
Netflop
Growth concerns
US film streaming service Netflix, which has been the biggest riser on S&P500 this year after seeing its share price triple, disappointed investors this week with weaker-than-expected growth in subscriber numbers. The service, which offers on demand films and television series streamed over the internet into the home, has been growing rapidly but in the most recent quarter added 630,000 new customers in the US, 10 per cent short of analysts expectations of 700,000. This prompted some concerns over its growth rate and whether its evolving strategy of commissioning its own high profile series, such as House of Cards, is sustainable if the content is not compelling enough.
Bonds shrink
Payouts cut
National Savings & Investment (NS&I) this week announced a reduction in its annual Premium Bond payout fund of 0.2 per cent to 1.3 per cent from the start of August, which increases the odds of a single premium bond winning from 24,000 to one to 26,000 to one. The number of prizes in the £5,000 and £25 categories will shrink but NS&I says the £1m, £100 and £50 prizes will still be the same. But for investors looking for returns in an increasingly yield-starved investment universe, the reduction in returns from such a low risk product will be a disappointment.
Euro hope
German boost
Signs that the German economy is getting back on the growth track boosted investor confidence midweek. Surveys of economic activity have been a source of concern of late, but flash figures for German composite output and services activity, produced by Markit, posted five month highs of 52.8, whereby anything over 50 indicate expansion. Furthermore, the manufacturing output index hit a 17 month high of 53.4. This was accompanied by improving news out of France where although the manufacturing and services sectors are still showing contraction, this is slowing, and output from the manufacturing sector hit a two year high. On a eurozone level, private sector output squeezed into positive territory for the first time since January 2012, fuelling hopes that the economic bloc may be about to drag itself out of recession.
