Was this the week that Brexit finally bit? After smashing through 7,000 last week, the FTSE 100 began where it left off, rising to an all-time intraday high of 7,124.69 by Tuesday lunchtime. But as investors began to digest the implications of a ‘hard’ Brexit and the Bank of England warned of job losses in the City, the index swiftly reversed course to end down 0.95% by Thursday’s close.
The FTSE’s early gains followed a familiar pattern, with the index rising as the pound fell. But by Thursday’s close, both shares and sterling were down for the week, with the pound buying just $1.22 in US dollars. The pound is the worst-performing currency this year apart from the Argentinean peso.
But while the weak pound upsets those heading abroad for the mid-term break, it has been welcomed elsewhere. Princeton’s Professor Ashoka Mody, formerly a bailout expert for the International Monetary Fund, hailed the slump in sterling because “the strong pound hurt job creation and investment in productivity growth”.
Mervyn King, the former governor of the Bank of England, agreed: “During the referendum campaign, someone said the real danger of Brexit is you’ll end up with higher interest rates, lower house prices and a lower exchange rate, and I thought: dream on. Because that’s what we’ve been trying to achieve for the past three years and now we have a chance of getting it.”
Love it or hate it …
Is Marmite only thing more divisive than Brexit? Perhaps the most tangible effect of the referendum so far – and certainly the tangiest – has been the spat between Tesco and Unilever over Marmite. Despite the fact that the yeast-based spread is made entirely in Burton-on-Trent, Unilever had demanded price increases to compensate for foreign-exchange losses. When Tesco refused to pay up, deliveries of Unilever products were halted. Marmite went missing from the shelves of certain stores and vanished from Tesco’s online store. After a 24-hour standoff, the two consumer giants managed to resolve their differences and end the Marmite drought.
Global gloom
Global markets also lost some of their poise this week, with the FTSE Europe down 0.94% and S&P 500 index down 0.98% by the end of Thursday. The US results season got off to a bumpy start when Alcoa disappointed investors with its third-quarter results. In its last report before it splits itself in two, the reporting bellwether blamed lower aluminium prices and postponed aerospace orders for the year-on-year fall in its revenues. Its shares tumbled, and the US market slumped in sympathy. The minutes of the US Federal Open Market Committee pointed to a likely rate rise in December, adding to the global malaise.
Shot down in flames
There was some gloomy news in the technology sector too. The week began with a further sharp drop in Twitter’s shares after weekend reports that Salesforce would join Alphabet and Walt Disney in abandoning efforts to acquire the company. Meanwhile, Samsung was forced into a second round of recalls of the Galaxy Note 7. The not-so-smartphone caused the evacuation of a US flight at the end of last week after its battery caught fire. Samsung has now withdrawn the product from sale.
And finally …
Perhaps Samsung should take heart from history. In an age in which technological leaps can seem dizzying, it’s easy to forget that innovations often don’t seem that promising at first. Why, for example, did gunpowder ever overtake the longbow on the battlefield latter was initially far more effective? And why did the first motor cars catch on when the horse was still a better bet?
Part of the answer is training. A longbowman needed years of regular, gruelling training, which is why various Scottish and English kings banned football to promote archery. After this week’s results against Slovakia and Slovenia, you might be forgiven for wishing the ban was still in place. And you can’t just jump on a horse and shout “tally ho”. You need months of patient (and painful) practice.
But the other point is persistence. Some farsighted individuals see the potential of new-fangled gadgets and just keep on keeping on. So spare a thought for Mark Rittman of Hove, who spent much of Tuesday trying to get his wifi kettle to work. The Smarter iKettle promised to save a whole two days a year in boiling time, but debugging, base-station incompatibility and network connectivity kept the water untroubled by heat.
Naturally, Mr Rittman live-tweeted his ordeal as it unfolded. The total time it took for him to get his cuppa? A mere 11 hours.
