NEWS, VIEWS & TRUTHS (23RD JUL – 27TH JUL)

It’s another scorcher and I’m not just referring to today being Furnace Friday.  Whether you are basking in the sun’s rays or sheltering from the thunderstorms, take time to read this week’s News, Views and Truths.

So yes, Furnace Friday is a thing concocted by the media. Today, England is set to be the hottest country in Europe with temperatures forecasted to reach 36°C, leading to the cancellation of a number of outdoor events.

To highlight this, the MCC broke its strict dress code, allowing members to enter the pavilion at Lord’s Cricket Ground without a jacket for the first time in its history.  And as large numbers of stargazers were expected to gather tonight to view the lunar eclipse, which could see the moon turn a deep burgundy red from around 9pm, firefighters called for a ban on barbecues in parks in case sparks set light to parched grass.

Markets have had a less extreme time this week; aside from Facebook of course…

Facebook’s value plummeted $119bn on Thursday, the most dramatic share price decline of any company in US stock-market history, after the social networking firm reported slowing growth in user numbers following a string of recent scandals.  Investors frantically sold the stock, ending the day 19% down.

To put this fall into context, the sell-off eclipses the $91bn wiped off the value of Intel during the depths of the dot-com bust on one day in September 2000.  Apple’s market cap fell $60bn on 24 January 2013 after the company reported its slowest profit growth in a decade, while Exxon Mobil’s value was slashed by $53bn on one day in October 2008.

However, despite the news that they announced its slowest user growth numbers for more than 2 years, it still has 2.23 billion monthly active users – almost a third of the population of the planet – at the end of June, equating to 11% more than it had a year earlier.

Furthermore, although analysts have pointed to a change of focus from the traditional newsfeeds that have provided monetisation within the company, to the newer “stories” content, many commentators are indicating that, over the longer term, this more media rich content will provide greater revenue growth into the future.  As such, although the fall has been dramatic to say the least, it is highly unlikely that the Facebook story is over.  In fact, it could simply prove to be a very attractive buying opportunity…

And as I mentioned previously, despite Faceboook, the markets have been pretty benign.  Unsurprisingly after the recent strong rally in developed markets, most markets have given back a smidge this week.  The FTSE 100 is down 0.16%, mirroring the Japanese Nikkei 225.  Emerging Markets has had some respite after a torrid few months, entering positive territory at 1.22% up for the week and the US S&P 500 shows no sign of stopping under the power of Donald with another positive week, closing yesterday’s session at 0.90%.

To conclude in our usual way, please enjoy this week’s sun-drenched playlist.  Enjoy the weather, if it lasts, and keep living the dream.


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