Monday, 10 February 2014

Monday thoughts - high price IPOs, Japan's trade deficit, provocative views on Europe's banks

Some early Monday thoughts.

AO (which originally stood for 'Appliances Online') is IPO'ing in the UK market.  That's a pretty punchy prospective multiple...

The Japanese current account deficit in December was Y639bn ($6.2bn), the biggest on record and the third monthly deficit in a row. Fast FT had a good chart which showed that despite the weak Yen over the last year or so, Japanese companies are preferring to drive value not volume i.e. they are not lowering prices.  Can't argue with that strategy company-wise but collectively it tells you that a weak Yen alone is not going to drive the Japanese economy: all eyes have got to be on domestic consumption and spending...

...and on this point interesting to note the latest Japanese consumer confidence data via Reuters

The survey's sentiment index for general households, which includes views on incomes and jobs, was 40.5 in January, down from 41.3 in December. A reading below 50 suggests consumer pessimism.

Oh dear...

Comment of the day so far has come from an interview with Danièle Nouy, head of the euro area’s new banking overseer, the Single Supervisory Mechanism, who said in an interview in the Financial Times that:

“We have to accept that some banks have no future...We have to let some disappear in an orderly fashion, and not necessarily try to merge them with other institutions.”

Finally, more and more hours being worked in US manufacturing (x-axis)...but capacity utilisation very middling historically (y-axis).  The productivity 'problem' continues.

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